It is one year since Keir Starmer won the UK election with his Labour party. Upon coming to power, the new prime minister promised "national renewal" and committed to a series of economic targets. Bloomberg Opinion Columnist Rosa Prince breaks down the situation.

London

One year into Keir Starmer's tenure as UK Prime Minister, the Labour government has maintained a focus on fiscal discipline, with Chancellor Rachel Reeves emphasizing budgetary restraint. While some planning reforms and infrastructure projects have been initiated, economic growth remains limited, with forecasts suggesting an increase of around 1%.

Despite domestic challenges, the government has achieved significant foreign policy successes, including trade deals with India, the European Union, and the United States. However, Labour has faced setbacks on welfare reform and continues to grapple with limited options for funding public services, as borrowing and tax increases remain contentious issues.

One year of Starmer as UK PM: Where does Labour stand?

some degree of calm has returned, at least for the markets in Britain, with Chancellor Rachel Reeves underlining her commitment to fiscal discipline and reassurances about her position from the Prime Minister, Keir Starmer. Now, the market moves have really underscored the fragility of Britain's economic position, as the Labour Party marks one year in power. Let's get more now from Bloomberg Opinion's Rosa Prince. Good morning, Rosa. We've seen the Labour Party promising to make growth its top mission. So really, as we review this first year in office for Starmer, how's the party doing so far? Yeah, not so great. As you say, I think they thought that they could put everything into growth as a way of balancing those books. But it's easier said than done. You can't just press a button and suddenly achieve growth. So there are some measures which have been successful. They've put through some planning reforms and greenlit a lot of infrastructure projects, which I think they hope will achieve growth in the longer term. Shorter term, not so much, particularly that budget that Rachel Reeves herself unveiled back in the autumn, which really hit businesses hard and led to a lack of investment, a lack of job creation. And the figures speak for themselves, really. I think we're on course for growth of about an anemic 1%. And what have been the wins this year? Yeah, it's not been all bad. I think if you'd asked Keir Starmer at the start of his term whether he thought he'd do better on the domestic front or the foreign realm, I think he would have said domestically. But in fact, he's proved rather an adept world leader. He's handled President Trump in particular better than most other world leaders. Britain has signed three important trade deals, India, the European Union, and that trade deal with America. And I think it's been the only country so far to manage to mitigate some of those tariffs he's been talking about this morning. So that's probably the big policy win from him. And of course, we've got to talk about the chaos this week, Rosa. The drama really centring around Starmer's U-turn, forced U-turn on welfare reform. But there have been a series of walkbacks recently. Looking ahead, what are the challenges that he's going to face in terms of seeing through his big agenda? I think the major challenge and the thing that everything comes back to really is that this government is so boxed in on its room for manoeuvre on the economy. So as we were saying, he had wanted to get some growth going in the British economy and really be able to fund those projects that he cares about, like improving public services. The growth hasn't come. They had hoped then to make the numbers adds up by doing some public sector cuts. And as the welfare reform debacle showed this week, that's proved harder than they expected as well. So that really leaves only breaking the borrowing rules, which Rachel Reeves again committed to not doing. She says that she will continue to balance the budget and that borrowing will not rise. Then we've only got tax rises left, which again is the last thing that this Labour government wanted to do. So going forward, they've got a budget coming down the track there again. We don't know exactly when, but it'll probably be at the end of October or early November and the difficult choices are coming. And no wonder Rachel Reeves was finding the pressure really quite tough.

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