Stages of Economic Growth with savings and investment (Photo credit: Wikipedia)
Business (Photo credits: http://www.roadtrafficsigns.com)
This “good news” story in the Guardian is a MUST READ. Check it out!
via CBI doubles George Osborne’s economic growth forecast | Business | The Guardian.
Whilst this story will help to revive George Osborne’s political capital, it still recognizes that there are risks to the UK economy.
The biggest risk, of course, is that the UK’s businesses are still not investing. Both John Gelmini and I have indicated many times on this blog that there is is an urgent need for fiscal stimulation to increase capital investment. Also concentrated Government action is required to focus on massively strengthening the export sector.
The consumer led growth is largely on the back of Government guarantees to home-buyers which is potentially both inflationary and inherently risky. Still there is a major risk that the banks are not working properly, preferring low risk home loans, rather than more complex loans to small businesses.
Let me turn this to three open questions about how should Chancellor George Osborne:
- Stimulate greater business growth?
- Expand both the breadth and depth of prudent bank financing?
- Start to heal the scars of austerity, especially in the non-property owning sectors of society?
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