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Prime Minister Sir Keir Starmer will on Monday pledge to make Britain the “best partner state” for the world’s artificial intelligence companies, as he tries to boost the UK’s growth prospects against a poor economic and political backdrop.

Starmer, writing for the Financial Times, claimed Britain’s “values ​​of democracy, open commerce and the rule of law” made the UK a natural location for AI companies to invest, and vowed that eliminate planning restrictions and create new “AI growth zones.”.

“I am determined that the UK will be the best place to start and scale an AI business,” he wrote. “I know that development in this area cannot be done by the state. But it is absolutely the government’s job to ensure that the right conditions are in place.”

Starmer hopes to bounce back after a week in which his economic plans were battered by markets, leaving chancellor Rachel Reeves potentially facing the need to cut spending or raise taxes to keep her fiscal plans.

Reeves, who returned from a visit to China on Monday, will this week “haul” regulators to tell them to be more ambitious in removing barriers to growth.

While Starmer faced calls from Kemi Badenoch, Tory leader, to sack of his City minister Tulip Siddiqwhose position remains precarious after he was embroiled in a property scandal tied to the ousted Bangladesh government.

Last week the cost of borrowing in Britain rose to almost 16 years old against a backdrop of sticky inflation and fears that Reeves’ tax-raising Budget is contributing to sluggish growth.

The sense of economic gloom was compounded by a survey of chief financial officers in the UK by Deloitte, which showed that business optimism fell to a two-year low in the fourth quarter.

The survey found that a net 26 percent of CFOs reported feeling more pessimistic about their business prospects than three months ago, marking the first time sentiment has dipped into negative territory since the second quarter of 2023. .

CFOs say cutting costs is their likely response to Reeves’ £25bn increase in employers’ national insurance contributions.

Deloitte said UK corporations are expected to cut capital spending, discretionary spending and reported the worst fall in hiring expectations since the pandemic. However, the survey found that confidence is above the lows seen in 2020 and 2022.

Mel Stride, shadow chancellor, told the BBC that “business confidence has fallen through the floor because of the actions taken by the government” and insisted that Reeves would cancel. his visit to China to calm the markets.

But an adviser to the chancellor said: “Is he seriously saying that he has to cancel the trip to stay at home at the weekend to respond to a closed market? It is right that this is seen in the markets as panic. “

A Starmer ally said any suggestion Reeves’ position was under threat was “complete rubbish”.

Starmer remains confident that Reeves’ October Budget, which seeks to strengthen public finances and support public services with a £40bn tax hike, will be vindicated in the long run, despite the market turmoil. .

Reeves had planned his own speech on growth, but it has been delayed until after his trip to the World Economic Forum in Davos later this month.

On Thursday he will convene eight regulators to explain what they are doing to boost growth. To her Mansion House speech in November he told watchdogs: “The UK is regulating for risk, but not regulating for growth.”