Economy2026-07-04★★★★

UK Treasury pushes to stimulate investment across the UK through a revision of the 'Green Book'.

The UK Treasury announced that on July 3, 2026, it will promote investment in communities across the UK that have suffered from decades of underinvestment and neglect, through a revision of the 'Green Book'. This is part of reforms to the way projects are appraised, led by the Chancellor of the Exchequer, aiming to foster regional balanced development and expand economic opportunities. The new guidelines are expected to give greater weight to the efficiency of public sector investment and its regional ripple effects.

UK Reforms Public Investment Guidelines for Regional Rebalancing The UK Treasury announced on July 3, 2026, that it would revise the 'Green Book', the economic appraisal guidance for government projects, to boost investment in communities across the UK. This revision specifically focuses on expanding public investment in areas that have historically received insufficient investment and placing greater emphasis on evaluating the ripple effects on local economies. The Chancellor of the Exchequer emphasized that this reform is a core part of the 'Levelling Up' agenda and will contribute to the equitable distribution of economic opportunities across the UK.

Why It Matters The 'Green Book' is a key guideline used by the UK government to assess the economic viability of public projects. The previous appraisal method primarily prioritized economic efficiency based on cost-benefit analysis, which often resulted in investment being concentrated in already developed regions, such as metropolitan areas. This revision is interpreted as an attempt to overcome these limitations and balance investment by considering a wide range of factors, including social value, environmental impact, and local economic revitalization effects. This demonstrates that the UK government is pursuing inclusive and sustainable development, beyond merely increasing economic growth rates. Notably, this, along with the UK Treasury's announcement on June 10 to establish an AI Economic Research Institute, signaling the full-scale institutionalization of AI policy, showcases broad policy efforts to secure future growth engines.

Impact on the Korean Market The revitalization of regional investment due to the UK's 'Green Book' revision could offer new business opportunities for Korean construction and infrastructure companies. For example, companies like Hyundai Engineering & Construction (000720) or Daewoo Engineering & Construction (047040) could explore opportunities to participate in infrastructure projects or urban development initiatives within the UK. This could lead to an increase in overseas construction orders, positively impacting the performance of these companies. However, the number of Korean companies directly impacted by the UK domestic market may be limited. While the overall revitalization of the UK economy could have a positive, albeit limited, impact on major European bond markets, such as the German 10-year government bond (DE10Y), the direct impact will be restricted. Industrial metals like platinum (PLATINUM) could see increased demand due to rising infrastructure investment, but the direct impact of the 'Green Book' revision on platinum demand is expected to be negligible.

Future Scenarios The UK Treasury's revision of the 'Green Book' will serve as a crucial benchmark determining the direction of future public investment in the UK. The government is expected to actively pursue new infrastructure projects, research and development investments, and regional industry promotion initiatives based on the revised guidelines. A key point to watch going forward is whether these policies will bring tangible effects to revitalize the economies of regions that have historically lacked investment. An optimistic scenario is that balanced regional development is successfully achieved, increasing the overall growth potential of the UK economy, while a pessimistic scenario is that the anticipated effects are not realized due to reduced investment efficiency and increased fiscal burden. Investors should closely monitor the UK government's policy implementation and changes in regional economic indicators.

Impact analysis

Hyundai Engineering & Construction

Increased regional investment in the UK could lead to a rise in infrastructure and construction projects, offering new order opportunities for companies with overseas construction capabilities like Hyundai Engineering & Construction. This is positive for securing mid-to-long-term growth drivers.

Daewoo Engineering & Construction

The UK government's expansion of public investment could provide opportunities for domestic construction companies like Daewoo Engineering & Construction to expand their overseas business. They can particularly explore participation in new projects within regional development and infrastructure sectors.

BondGermany 10Y Treasury

The revitalization of the UK economy could boost overall growth expectations for the European economy. This may indirectly have a positive impact on investor sentiment for major European bonds like the Germany 10Y Treasury, but the direct impact on interest rate fluctuations is expected to be limited.

CommodityPlatinum

While increased infrastructure investment could boost demand for industrial metals, platinum is primarily used in automotive catalysts, so the revision of the 'Green Book' is expected to have a minimal direct impact on platinum demand.