Former adviser to chancellor George Osborne, Tory MP Matthew Hancock, has made a massive error in his analysis of the American economy, writes Duncan Weldon.
Tory MP Matthew Hancock has made a massive error in his analysis of the American economy, writes Duncan Weldon
Tory MP and former George Osborne advisor Matthew Hancock has written a post for the Spectator’s Coffee House blog claiming that Labour are drawing the wrong lessons from America.
He accuses Ed Balls of getting “his figures wrong” on the US deficit plan and makes the bizarre claim that the US plan involves cutting faster than his own government’s plan. This is despite the IMF last week describing the UK plan as the “largest fiscal adjustment” of the major economies.
People who live in glass houses shouldn’t throw stones and Hancock himself makes a colossal factual error. His whole argument is underpinned by the notion that if countries do not quickly deal with their deficits then the bond markets will extract a high price. He uses the example of the downgrading of the US last week and claims that this has caused US interest rates to rise.
“The consequence? US interest rates have risen, just as they would do here if we were foolish enough to abandon our plan… The down-marking of US debt, and the reaction of US interest rates that followed, shows the gamble we would be taking if we abandoned our plan.”
The problem with this claim is that it is factually incorrect. US bond yields fell after the downgrade – something widely remarked on in the financial press and something he really ought to have checked before publishing the article.
32 Responses to “Matt Hancock is drawing the wrong lessons from America”
scandalousbill
Anon,
You say,
What’s happening here is the austerity measures are working and everyone knows it. The chancellor has been proven to be correct in his approach towards the deficit and Labour have been proven to be completely wrong.”
Before we go any further, could you kindly provide the indicators you base this statement on?
And please don’t give me the “oh we are expecting a 0.8 increase in GDP this quarter” as your answer
scandalousbill
or we still have a AAA rating….!
Anon E Mouse
scandalousbill – Well both your final remarks are true and certainly are more factual than this pile of nonsense written here. I’ll be more comprehensive in my answer tomorrow. On an iPhone – my MacBook is at work and this touchscreen is impossible!
Tom White – Grow up and stop telling lies in public forums. Your party is a busted flush and nothing Guido and I have said is not true. You can’t handle the truth clearly….
Anon E Mouse
scandalousbill – Inflation down. Retail sales and car manufacturing up.
One million new jobs in JobCentre Plus in a year.
How’s that?
scandalousbill
Anon,
You need to do alot better than that.
BTW When did inflation go down?