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    RESEARCH  |  3 POINT PERSPECTIVE

    Green shoots of growth: UK infrastructure opportunities

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    Contributors: Jordan Isvy, Jack Meaning, Pranava Boyidapu, Dominic Nash
    20 Mar 2025

    The UK government is targeting a range of growth initiatives as it aims to put longer-term public finances on a firmer footing. Our Research analysts view recent announcements as potentially positive for growth, as they promise supply-side measures that could boost productive capacity without increasing inflation. But the outcome depends on the contribution of the private sector.

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    Building and construction
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    1. UK Housebuilding: Home comforts 

    The government's housebuilding plans are bold. A target of 1.5mn homes in England over the life of the current parliament implies 300,000 properties a year, which is more than have been built in any given year for half a century. 

    What’s more, the backdrop is challenging, given a tight fiscal position and subdued investment activity in the private sector. In that context, proposed reforms to the National Planning Policy Framework will be critical to spur investment, in the view of our Research analysts. Among the changes: a reinstatement of mandatory housebuilding targets for local authorities, more regular release of “grey belt” (previously developed) land within the Green Belt, and a swifter process when applying for permission to develop sites.

    Higher grant funding from the government, or at least more rapid disbursement, also seems a prerequisite to encourage the building of new energy-efficient homes.

    If momentum builds, however, the boost to growth over a longer-term horizon could be significant.

    2. UK Transport: Driving forward

    During last summer’s election, the Labour party noted the potential of the transport sector to improve labour productivity and reduce dependence on imported fossil fuels – all of which would contribute to its priority of kickstarting economic growth.

    Discussion has since focused on several overlapping initiatives: on roads and rail, and in the air. With respect to electric vehicles, for example, the government has pledged to accelerate the roll-out of charge points and has also given a measure of certainty to manufacturers by restoring 2030 as the phase-out date for new cars with internal combustion engines. 

    On railways, the government wants to nationalise rail network operators and has set out plans to create Great British Railways, a public company tasked with overseeing infrastructure and operations. On airports, the government has signed off on the expansion of City and Stansted and is considering extra capacity at Luton, Gatwick and Heathrow.

    Our Research analysts are encouraged by such measures, as they are likely to deliver growth that boosts the UK’s productive potential. 

    3. UK Energy: Power plays

    One of the Labour party’s goals is to turn the country into a clean energy “superpower”. Under the government’s plan, produced last December, it aims to achieve at least 95% of low carbon generation by 2030, five years ahead of the target adopted by the previous, Conservative government. That means Great Britain would generate enough clean power to meet its total annual electricity demand, backed up by unabated gas only when unavoidable.

    Much attention has focused on the government’s planned creation of Great British Energy, a publicly-owned energy company designed to catalyse investment into clean-power projects in the UK, with £8.3bn committed over the course of this Parliament. Prime Minister Keir Starmer has also set out plans to make it much easier to construct mini nuclear power stations, pledging to “build, baby, build” in a bid to create skilled jobs and boost growth.

    A review of the UK electricity market is also under way that could result in a zonal pricing system. Our analysts note this could provide better price signals for new development and transmission requirements, especially in areas of current over-supply, such as Scotland. However, such a scheme would come with material risks, including price volatility and increased costs for consumers in the south. 

    On all three fronts – energy, housebuilding and transport – our Sustainable Investing Research analysts view the government’s announcements favourably, in so far as they lower barriers to investment and galvanise the private sector. However, the effects are unlikely to be felt within the next couple of years and probably not within the five-year horizon relevant for the Office for Budget Responsibility, the independent forecaster, whose next assessment is due on 26 March. If the OBR is unable to score any pledges positively, then the government is unlikely to be credited with more room to borrow.

    The key challenge for the government, then, is that any boost to growth is likely to come later than the fiscal expenditure required to catalyse it. That creates a tricky political, as well as economic, choreography.

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    About the experts

    Jordan Isvy

    Assistant Vice President, Sustainable Investing Research

    Jordan Isvy is an AVP in Barclays’ Sustainable Investing Research team, based in London. His main focus is on embedding ESG principles into macroeconomic analysis, focusing on international energy transition themes ranging from green industrial policy to climate and nature risk. He also focuses on ESG credit strategy research and covers the ESG-labelled securities market. He joined Barclays in 2022 from KPMG UK, where he worked as a management consultant assisting FS clients with their ESG strategy implementation. Prior to this he worked at BwB, a social enterprise that makes high-impact social and environmental projects bankable by aligning these with the investment requirements of capital markets. He holds a degree in Economics & Economic History from the University of Edinburgh.

    Jack Meaning

    UK Chief Economist

    Jack Meaning is Barclays’ UK Chief Economist, responsible for devising and delivering the bank’s view on the macro outlook for the UK economy. He joined Barclays in 2023 from the Bank of England, where he spent three years as the Economic Advisor to the BoE’s Chief Economist. He also led the team that designed and evaluated the Bank’s monetary policy tools. In 2022, Jack coauthored the now international, best-selling pop-econ book Can’t We Just Print More Money? Jack has published a number of academic papers and earned his PhD in Economics from the University of Kent, where he was awarded the prestigious ESRC scholarship. He is also a fellow of the Royal Society of Arts.

    Pranava Boyidapu

    Director, Credit Research

    Pranava Boyidapu is a Director in Credit Research, based in London. She is responsible for coverage of the European Real Estate sector; European Securitized Products, including CLOs; and UK Housing Associations. Prior to joining Barclays in 2018, Pranava spent seven years at Natwest Markets in research and strategy roles covering the European securitisation market across all asset classes, with a focus on regulatory developments. Pranava holds an MBA from the Indian Institute of Management Calcutta and a bachelor’s in Mechanical Engineering from the Indian Institute of Technology Madras.

    Dominic Nash

    Head of European Utilities

    Dominic joined Barclays in December 2018 as head of European Utilities research. Prior to this, Dominic was head of utilities, renewables, infrastructure and transport research at Macquarie. Dominic started his utilities career in 1998 working for Offer (now Ofgem) on utility retail deregulation. He joined the Credit Suisse European utilities team in 2000. In 2005 he moved to Credit Suisse prop trading, where he became head of their global utilities, renewable and infrastructure investments. In 2010 he returned to research at Liberum Capital. Dominic holds a PhD (Chemical Engineering) from the University of Cambridge.

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