UK plc is being held back by lack of business investment

A lack of funding will act as a drag on long-term growth – Jeremy Hunt should look at a tweaked version of a policy pushed by his predecessor, writes James Moore

EasyJet and Rolls-Royce have powered a concept aircraft engine with hydrogen. Britain badly needs this sort of investment (Rolls-Royce/PA)

Mercifully, it looks as if the recession we are facing is going to be a lot shorter than was originally feared. The Bank of England has said as much. The widely followed EY Item Club of economic forecasters is of a similar view. Its latest update is out today.

The Club now thinks that the current downturn will be neither as long nor as damaging for the economy as were the nasties that hit UK plc in the 1980s, 1990s, and 2000s.

There are also reasons to be cheerful about inflation. While it is expected to be high by historic standards throughout this year, the Club thinks we’re past October’s 11.1 per cent peak. It has the Consumer Prices Index falling to just under 4 per cent by the end of this year.