Foreword  3

Basic statistics of the United Kingdom, 2025  7

Executive summary  8

1 Strengthening growth while ensuring fiscal sustainability  17

1.1. The economy has improved but faces major challenges  18

1.2. Monetary restriction remains needed until inflation is durably under control  28

1.3. Heightened financial market risks call for continued vigilance  30

1.4. Fiscal discipline and reforms will be key to sustaining growth  34

Recommendations on strengthening growth while ensuring fiscal sustainability  49

References  50

2 Ensuring state pension sustainability while closing gaps in private pension savings  55

2.1. The pension system features strengths and weaknesses  56

2.2. Long-term fiscal vulnerabilities in state pensions must be addressed  59

2.3. Supporting private pension savings for groups with coverage gaps is key  65

Recommendations on ensuring pension sustainability and affordability  68

References  69

3 Strengthening energy security in the transition to net zero  73

3.1. The green transition is reshaping energy security challenges  74

3.2. Enhancing energy security through coordinated decarbonisation  75

3.3. Embedding climate resilience in electricity system planning  86

Recommendations to strengthen energy security  88

References  89

4 Reducing regional productivity gaps to raise aggregate growth  92

4.1. Raising aggregate productivity by narrowing regional gaps  93

4.2. Addressing structural drivers of regional productivity gaps  98

4.3. Improving the financial and administrative capacity of subnational governments to deliver regional productivity gains  117

Recommendations to reduce regional productivity disparities  131

References  132