Just for the record … it’s being announced that UK 2nd quarter growth is barely positive. One again, there are “special factors” that get in the way – a tsunami and a Royal Wedding, warm weather and Olympics tickets, ffs. These really are very, very poor excuses.
And these are preliminary figures. So there’s still time for that downward revision …
Still, it could be worse, according to our Chancellor. We could live in Greece.
“And it is positive news too that at a time of real international instability we are a safe haven in the storm.”
Watching the TV, it seems that this is our fault – we aren’t borrowing money to spend (even if we can find a bank to lend it). Possibly because those whose jobs aren’t being cut may well be offshored.
Or maybe because we’re saving up to let their kids go to College. Or to help out parents whose care funding has been cut. Or because their pensions are under threat, so they need to save more. And that’s assuming that you can afford food and energy.
Ultimately, the problem hasn’t changed. We’re not making enough. And we need people who have disposable income to buy things. That won’t happen if they’re worried about their jobs disappearing.
So there’s no Income Tax and VAT – both of which help reduce the deficit. So if Ozzie blindly carries on down this path, we’ll end up with even more cuts needed. At the end of the last set of figures, commentators were feeding the line : “if a Chancellor admits there’s a Plan B, then Plan A is dead”. Well, George, you’ve had three months to put together a Plan B. Or – if it’s more politically expedient – find ways to moderate the impact of Plan A.
Stephanie Flanders’ blog points out that we’re not doing as well as comparable countries.
This was, actually, so very foreseeable. I wrote about it in January, because it was so clearly rooted in dogma, rather than economics. It needs sorting out. And I think that means either a Chancellor who actually knows what he’s doing, or one who will listen to someone who does..
[Edit 13:34]
Ozzie apparently thinks this absolutely flat growth has the advantage of “stability” – unlike less stable Euro countries (such as Germany) which actually have growing economies. Unbelievable.
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