Over the last decade, macroeconomic performance has been impressive: GDP growth has been robust and cyclical fluctuations in output have proved smaller than for almost any other OECD country, while inflation has remained close to target. This performance is a testament to the strength of the institutional arrangements for setting monetary and fiscal policy as well as to the flexibility of labour and product markets. But fiscal easing, while supporting demand since the global downturn in 2000, has led to a deficit of around 3% of BGDP. However, the main challenges relate to long-run structural performance, given that the United Kingdom still only ranks just above the median in terms of GDP per capita among OECD countries and has made little progress in closing the income gap with the best performing countries.......