David Prosser: Storm clouds gather for Britain's faltering economic recovery
Friday 17 September 2010
Outlook This really has not been the best of weeks for Britain's economy. Data suggesting that inflation remains stubbornly high was followed by the revelation that unemployment has now once again begun to creep higher. And yesterday's retail sales figures, suggesting that the resilience of consumers in recent months is now beginning to crack, were pretty miserable too. Even the CBI's update on the manufacturing sector, which looked more benign, included some unhappy-looking portents of trouble to come.
Policymakers such as Martin Weale, the new Monetary Policy Committee member who gave evidence to MPs this week, tend to paint a picture of an economy that is giving some very mixed signals. But while there is always the danger of talking ourselves into a double-dip recession, the picture is becoming less mixed by the day. All the indicators of recent weeks have been more downbeat. This is not to say a double dip is inevitable. But it is increasingly difficult to be confident that official forecasts for the performance of the economy in 2011 will be met.
The 2.3 per cent growth predicted by the Office of Budget Responsibility at the time of the emergency Budget three months ago, which was itself a downwards revision from the 2.6 per cent hoped for by Alistair Darling, the previous Chancellor, is a big ask. Indeed, institutions such as the International Monetary Fund, which have updated their forecasts for next year more recently, think it's too big, and predict lower figures.
Sluggish growth, even if recession is avoided, is a problem. It means higher unemployment (and therefore greater benefits expenditure) and lower tax returns. The Treasury will find it even more difficult to hit the ambitious targets the current Chancellor has set for bringing government borrowing under control. No wonder George Osborne is working on spending cuts that are based on the state of the public finances at the time of the Budget, even though borrowing since then has been lower than anticipated.
- 3 Russian girl takes her own life after parents find pornography on her computer
- 4 Ball pool for adults opens in London
- 5 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Kim Kardashian on Bruce Jenner's 'story': 'We support him no matter what, and I think when the time is right, he'll talk'
Russian girl takes her own life after parents find pornography on her computer
Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...