British Prime Minister Keir Starmer called for a "muscular state" to renew the country's economy as the Labor Party struggles to spur growth.

"We do need a more muscular state, freed from the red tape that stops us building, growing our economy from the grass roots, renewing every town and city on these islands," Starmer said during his speech today at the Labour Party conference in Liverpool, England. "It comes back to growth. So much of it comes back to economic growth."

However, the United Kingdom has experienced sluggish economic expansion since Starmer's Labour Party won the national election in 2024. Gross domestic product (GDP) slowed in the second quarter of this year, driven by a decline in production and reduced consumer spending.

GDP eased to 0.3% in the quarter ending in June, confirming a decline from 0.7% in the previous quarter, according to data today from the Office for National Statistics (ONS). The production sector's GDP fell by 0.8% in the quarter, following a 0.6% increase in the first quarter – both figures were revised lower.

The FTSE 100 ended the quarter today, hitting an all-time high, as Starmer reiterated a commitment to fiscal responsibility. The FTSE 100 index closed up 50.59 points, 0.5%, at 9,350.43, beating its previous record close of 9,321.40 in August.

Starmer said that "fixing our public finances, investing in new infrastructure, helping our public services off their knees … will be better for growth."

Starmer Says Reform UK Turning to ‘Politics of Grievance'

However, Starmer's Labour government has faced increasing public discontent over its fiscal, immigration, and policing policies. This has led to a sharp drop in public support.

If general elections were held today, the right-leaning Reform UK party would win. An Ipsos poll from September showed that 34% of those asked would vote for Reform, while just 22% would vote for Labour.

Public frustration with Labour's policies was evident at the ‘Unite the Kingdom' rally in London on September 13, 2025. Approximately 150,000 people from diverse backgrounds attended.

The prime minister criticized Nigel Farage and his Reform UK party for resorting to the politics of "grievance." He labeled the party's immigration policy as "racist" and questioned whether Farage truly "loves" Britain.

"Amazing to watch the Left attack the Right for ‘turning us into a culture of victims,'" Matt Goodwin, a British academic, writer, pollster, and campaigner, wrote on X." Gaslighting on a truly epic scale."

UK Manufacturing Slows in Second Quarter

The ONS data released today has indicated a weakening of the British economy.

Manufacturing output slowed to 0.2% in the second quarter, down from 0.3% the previous quarter. Only four of 13 manufacturing sectors registered an expansion in the second quarter.

"In the latest quarter we saw an increase in the household saving ratio, very little growth in consumer spending and a slight fall in output for consumer facing services, despite growth in services overall," Liz McKeown, ONS director of economic statistics, said. "Growth for 2024 as a whole is unrevised, though these new figures show the economy grew a little less strongly at the start of last year than our initial estimates suggested but performed better in later quarters."

The GDP for 2024 increased by 1.1%, unchanged from the previous estimate, according to the ONS.

Will Budget Speculation Hurt Confidence Further?

Thomas Pugh, chief economist at RSM UK, said: "The increase in the saving ratio suggests consumers turned more cautious in the second quarter. The big question now is whether speculation about the budget will undermine confidence further."

The UK will announce its Autumn Budget on November 26. British Chancellor Rachel Reeves will deliver a statement to the British Parliament, accompanied by an economic and fiscal outlook from the Office for Budget Responsibility.

Pugh warned that GDP in the second half of the year is likely to face pressure from rising inflation and slowing wage growth. The chances of further interest rate cuts in 2025 now "look slim," he said.

The Bank of England (BoE) opted to keep its key interest rate unchanged at its meeting on September 18, signaling caution as inflation remains stubbornly above target with little economic momentum.

Starmer Calls for Fiscal Discipline

During his address today, Starmer emphasised fiscal discipline, saying that "it does not matter if it is unfunded tax cuts or unfunded spending… You lose the economy and working people pay the price."

The Labour Party will build "an economy that unites every person, every community," standing "together as so often in our past, facing down the threats of a volatile world," Starmer said. "There will be a new country, a fairer country, a land of dignity and respect."

He urged the country to challenge "outdated dogma" by choosing "investment over austerity." He called for greater investment outside of London and the South East of the country, as well as "stronger workers' rights," to spur economic growth.

However, Starmer criticized ‘snake oil merchants' from both the right and left who tried to convince the public of a ‘quick fix' to Britain's challenges."

"Britain stands at a fork in the road," Starmer said. "We could choose decency, or we could choose division, renewal or decline, a country proud of its values, in control of its future, or one that succumbs against the grain of our history to the politics of grievance."

Farage responded, saying Starmer was "wholly unfit to be prime minister" and that the country faced "economic, social and cultural decline."

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