This is an excellent, MUST READ article from the Telegraph.
via UK economy close to ‘escape velocity’, say top economists – Telegraph.
If the article is to be believed David Cameron’s Government have carefully crafted a debt fuelled consumer spending boom based on expected house price inflation. This same government are the arch champions of austerity.
What about economic fundamentals like investment, exports, improving the UK’s competitiveness etc.?
It all smells to me like a pre-election gambit – more smoke and mirrors. If you want to focus on the real economy, take a look at John Gelmini‘s blog entitled “UK Government and Chinese Debt Crisis”
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“Close to escape velocity” implies that with 0.60% growth per quarter we are going to be able to move the economy into the sunlit uplands.
Andrew Dilnot former Director of the Institute of Fiscal studies gave a talk on this at at an event I attended in Newbury put on by KPMG.
He said that the UK,s economy had always grown at an average of 1.4% since 1946 and that whenever it succeeded in growing faster as it did in the 1960s, 1980s and now, successive Chancellors always had to put the brakes on later to bring things back into balance.
We are now more overpopulated than ever,less productive than ever(a 20% fall since the Olympic Games and the Jubilee),are exporting next to nothing and the City is already number 2 in the pecking order of global financial centres and by 2016 will be in 4th position with China leading the pack,Singapore 2nd,New York 3rd and London as the also ran.
Sadly we are no closer to “escape velocity” than we were after VJ and VE day under Sir Winston Churchill because the price we have to pay in” blood ,sweat and tears” still remains unpaid with the UK population living in a deluded condition with the day of reckoning arriving sooner than we think.