George Osborne fails on George Osborne’s terms
George Osborne fails on his own terms.
George Osborne fails on his own terms.
Some things are worth repeating because they are that important and some things should be repeated because they were not heard, or listened to, the first time. Some fall under both categories.
This Thursday we will find out whether or not the UK economy is in an unprecedented triple-dip recession. Economically, however, whether the country finds itself in a triple dip recession or not is largely symbolic – the chancellor’s austerity policies are failing and there is every chance they will go on failing unless he injects some stimulus into the economy.
Bill Gross, manager of the world’s largest bond fund for Pimco and one of the most widely followed and influential voices in the bond market, has attacked the UK’s and Eurozone’s austerity measures, saying that austerity is not the way to induce growth.
The International Monetary Fund (IMF) has cut the UK’s growth forecast more than any other major economy and called for the government to spend more to stimulate growth.
The graph below, produce by Canadian-based bank Scotiabank, shows the evolving nature of GDP forecasts as applied to the UK economy.
As we can see, this is the third consecutive year where the consensus for growth has started out at around 2 per cent before gradually being pushed down towards zero as time has passed.
Claims by the coalition government that the UK’s beleaguered manufacturing sector is beginning to show signs of recovery were dealt another blow this week by the reliable Markit/CIPS purchasing managers’ index (PMI), which showed that manufacturing contracted in the first quarter of 2013.
This policy will only work in the land where the Magic Job Tree grows alongside the Magic Money Tree that ensures all such jobs are well paid. And that only exists in the head of some policy wonks in Tory think tanks.
Larry Summers nails austerity on Newsnight
The below graph shows the trajectory of the US and UK economies under both George Bush and Barack Obama and Gordon Brown and David Cameron respectively.
It pretty much speaks for itself.