UK Government look to Pension Funds and Overseas Investment to stimulate the Economy

The government have announced several plans to stimulate the economic recovery in the UK. Despite widespread cuts in government spending, the reduction in the Budget Deficit has fallen short of plan. With limited scope for an increase in spending, the government are looking to Pension Funds and overseas investment to fund UK infrastructure projects.

The idea has merit as UK pension funds are finding it difficult to earn sufficient returns on their investments under the current economic climate. The government propose to set up infrastructure bonds offering a safe return on investment.

Overseas investment has also been sought to finance large infrastructure projects. The government will be looking to China and the Far East, who have already been investing heavily in property and utilities in the UK as these industries are recognised for generating a safe return. China have already stated their intention to invest in infrastructure in big economies.

The news that the George Osborne is proposing to spend billions of pounds on new infrastructure is a refreshing note in light of the dismal growth forecasts announced last week. The proposals include investment in new roads, railways and housing as this offers a quickfire solution for generating jobs and offering a safe return to investors.