The Mirage of the UK Economy being at Escape Velocity

Twickenham United Kingdom (Photo credit: @Doug88888)

I thank Dr Alf for reblogging the Telegraph article entitled “UK economy close to ‘escape velocity” says top economists’, Here’s my two cents on this story.

“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 for 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 center, 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.

In my view, the UK economy being at escape velocity is less than a mirage. Actually, looking again, at the definition of “mirage”, perhaps “escape velocity” is more of a hallucination, planted by the clever Tory PR people?

Any thoughts?

John Gelmini