The Coalition measures will promote a gradual recovery and growth, keeping us out of a double-dip recession
“[The Budget] will help companies invest, attract foreign investment, and boost growth.”
(Source: George Osborne, Budget Speech, 22 June 2010)
The ConDem budget of June 2010 will reduce growth and there is now a real risk of a double-dip recession. Further measures including the impact of the spending cuts will have a devastating effect on the economy.
The Office of Budget Responsibility said that Osborne’s measures would reduce growth significantly – from the 3.5% predicted by following Alistair Darling’s Budget to a much lower 2.3%.
(Source: OBR Pre-Budget Forecast 14 June 2010)
After the Budget, the Governor of the Bank of England said Osborne’s measures would reduce growth and increase inflation:
“the overall outlook is weaker than that presented in the May Report, reflecting the softening in confidence, the persistence of tight credit conditions and the faster fiscal consolidation,”
(Source: Mervyn King, quoted in the Daily Telegraph, 11 August 2010)
55% of the public think it is “very likely” or “fairly likely” Britain will go back into recession.
(Source: YouGov Poll, 16 August 2010)
Outgoing Chairman of the Office of Budget Responsibility, Sir Alan Budd, said that he was “not confident” Britain would avoid a double dip recession.
(Source: Interview on BBC Radio 4, as reported in Evening Standard, 16 August 2010)
FT Commentator Martin Wolf says the Coalition’s policies risk creating a double-dip recession which they have no idea how to deal with:
“How would the government respond if its plans generated a recession, as is possible and, in my view, probable? I have no idea. It would presumably rely on the Bank of England. There are reasons to doubt whether the latter would be very effective.”
(Source: Martin Wolf article in FT, 2 September 2010)
10 weeks after the Budget, Nick Clegg admitted that the recovery would be “choppy” and “uneven”.
“Of course this recovery which is starting is likely to be choppy and uneven.”
(Source: Nick Clegg Speech, 9 September 2010)
James Knightley of ING said: “With fiscal austerity being stepped up and consumer spending growth still falling there is significant reason for concern over the UK’s growth prospects.”
(Source: Reported in Evening Standard, 12 July 2010)
Finally Conservative Mayor of London Boris Johnson said that the ConDem’s economic policy was risking disaster:
“Of course it is a good thing to bear down on wasteful public spending, and the deficit must certainly be reduced. The question is how far and how fast this can be done without provoking a double dip recession – and the risk is that if there is a serious downturn at the end of the year”
(Source: Boris Johnson article in the Daily Telegraph, 6 September 2010)
From Howard Dawber