Alistair Darling, the former Chancellor, has warned that the UK economy could be stuck in the doldrums for 10 years or more.
He told a parliamentary press gallery lunch that the UK’s economic woes could be similar to those of Japan, where the 1990s are remembered as the lost decade, as the country’s economy stagnated.
Mr Darling said: “It has come to a pretty pass when people say bumping along the bottom is ok, because we aren’t going into a triple dip recession. But my fear is that we could be bumping along the bottom for an entire decade, if not longer. Look at what happened in Japan. The problem we have got is a lack of confidence.“
His warning will be taken seriously, because he accurately forecast in August 2008 that the UK was facing a downturn that could prove to be the worst since the 1930s, though at other times during his period as Chancellor, he was accused of being too optimistic.
Mr Darling added that “austerity is stifling economic recovery” and said the UK should be trying to persuade other EU governments to take step steps to stimulate economic activity. He said that the UK should be building more homes, and that it was “nonsense” to delay a decision about whether to expand Heathrow until after the next election – though he dismissed the idea of a new airport in the Thames estuary, put forward by London’s Mayor, Boris Johnson, as unworkable.
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