The United Kingdom’s good macroeconomic performance over the past decade has been underpinned by a willingness to embrace the opportunities offered by globalisation, together with regulatory policies that promote efficiency and economic resilience. As a result, productivity growth has remained strong, while the workforce has been boosted by immigration in recent years. Nevertheless, the productivity gap with the United States remains large, and a number of reforms should be pursued in order to further improve growth performance. There is also a need to further reduce the government deficit. This will require much slower growth in government spending and more effort devoted to ensuring that publicly-funded services provide good value for money. In recognition of the need to support those who are least able to benefit from globalisation, policy has focused on supporting the poorest members of the population, with a continued emphasis on encouraging participation in work. Nevertheless, employment rates among the least skilled remain too low. A key challenge is to raise education performance without significant further increases in expenditure, while a related key challenge is to ensure strong incentives for the least skilled to participate in the labour market and to progress in work. Finally, it remains important to ensure that the tax structure preserves the United Kingdom’s position as an attractive business location.