James Moore: It's time for George Osborne to come up with a Plan C


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The Independent Online

Outlook Talking of deficits, yesterday provided another gloomy set of numbers suggesting that the economy isn't going to do much to help the Coalition's bid to eliminate the UK's budget deficit. Au contraire.

Much hope has been riding on manufacturing and recently business surveys have suggested that there are grounds for optimism. Not so fast, says the ONS, the sickly sector has failed to shake off the twin afflictions of the flailing eurozone and weak domestic demand. Output is still well below its pre-recession level and by the time the year is out it could well be flat or even down when compared to the previous 12 months.

To be fair, the figures are patchy. Some sectors are doing quite well and it is dangerous to rely too much on one set of numbers. Given the uncertainty that prevails they are bound to be volatile.

All the same the situation isn't a happy one. Some imagination from the Chancellor might help but that appears to be in short supply. George Osborne would probably still be droning on about the lack of a plan B if the UK were following Greece off a cliff.

This leaves the economy reliant on monetary stimulus for support. Members of the Bank of England's Monetary Policy Committee might like to ask why their policy of buying up government bonds, or quantitative easing, is having so little effect on the real economy at their next meeting. Just a thought.