Warning lights are flashing red after a year of Labour in power, according to an analysis by the Adam Smith Institute. It has devised a traffic system so ministers face the same accountability business leaders expect. The think tank warns the Government is under-performing when it comes to “growth, inflation, employment, and housebuilding”. It claims Sir Keir Starmer’s Government is “off-track on its key economic pledges”. and the outlook is “bleak”

However, it says Labour is “on track on its pledges to add two million new NHS appointments, hire more mental health staff and is likely to raise defence spending to 2.5% of GDP by 2027”. The ASI’s new “accountability tracker” will monitor progress on a host of measurements.

Sir Keir last year talked of wanting annual growth of 2.5% but the think tank says coming to power monthly growth has only been 0.09%.

It adds: “Housebuilding is also falling behind. Between July 2024 and March 2025, just 142,800 homes were completed – an average of 15,900 per month. To meet the target of building 1.5 million homes by 2029, construction needs to significantly ramp up.”

Charles White-Thomson, a senior fellow with the ASI, said: “If we want to improve the performance of our politicians, they need to be subject to the same level of scrutiny the private sector demands. That means objectively assessing whether they have actually delivered on their commitments.

“The data shows a worrying imbalance. While the Government is largely delivering on its spending commitments, it is failing to grow the economy as planned, missing its targets on growth, inflation and employment.

“This spells trouble. Without stronger economic performance, the Government will not be able to fund its ambitious spending commitments, risking higher taxes and more borrowing. If ministers don’t improve, the UK risks sinking further into a spiral of stagnation and decline.”

Reform UK deputy leader Richard Tice said: “Rachel Reeves’ track record on the UK economy so far has been higher inflation, higher debt, fewer jobs and lower growth so it’s no surprise red warning lights are flashing on the UK economy’s dashboard. If Labour were actually serious about growing the economy, they could start by slashing wasteful government spending and scrapping the £30billion per year cost of net zero.”

Richard Fuller, Shadow Chief Secretary to the Treasury, said: “The Conservatives warned that Labour’s tax rises and higher borrowing would choke growth and fuel inflation – and this report confirms it. However, Labour are ignoring these indicators and instead are planning another tax raid in the Autumn.

“Labour must recognise that we cannot keep increasing taxes – businesses are closing, there are no jobs and the economy is shrinking. Only the Conservatives, under new leadership, believe in sound money and low tax.”

A Government spokesperson said: “We had the fastest growing economy in the G7 for the first quarter of 2025, and since July have secured three trade deals, four interest rate cuts, attracted £120billion of investment and created 380,000 jobs since coming into office. Our first job was to stabilise the British economy. We know there is more to do, and that is why we will deliver growth to support the creation of good, skilled jobs that will raise people’s living standards.”