Tuesday, May 31, 2011
George Osborne and the Economy
In its quarterly report out today, the BCC became the latest body to lower its expectations for the economy, forecasting growth of 1.3% in 2011 and 2.2% in 2012. That compares with its previous predictions of 1.4% and 2.3%, and is below forecasts from the UK government's financial watchdog, the Office for Budget Responsibility, which expects growth of 1.7% this year and 2.5% for 2012.
This after a number of other experts and agencies have said rather the same sort of thing.
1. Barack Obama carefully avoided endorsing a cuts only approach, preferring 'a mix of cuts' plus focused thought about 'how do we generate revenue.'
2. Chief economist at the OECD who said there was 'scope for slowing the pace' of the cuts.
3. The OECD also predicted UK 's economy would grow not by 2.5% as forecast last May but only 1.4%.
4. Osborne's own Office of Budget Responsibility has also reduced growth forecasts several times.
5. The CBI reports a 'shrp' decline in consumer trade in the first quarter of 2011.
6. Household spending is suffering a slump greater than anything since 2009.
7. Business investment is down by 7.1& during the first quarter.
8. Inflation is up to nearly 5%.
9. There is no sign that cutting the public sector is automatically kick starting the private sector.
There will come a time and maybe it has already arrived when laying all the blame for our parlous economic state on Gordon Brown's tenure in office will not cut any ice with voters. On present performance, Osborne might have to discover a way of slowing down his cuts and listening to advice from sources other than his blind Tory prejudices.
Tories know only one thing and that is how to cut! I remember the Thatcherite years which were a disaster for our industry. "She" was too intent on pursuing a political agenda, which was to destroy the unions at all costs.
When Thatcher did think about encouraging investment then this did not work. Does anyone remember De Lorean?!
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