Independent UK: Britain bears the full force of an economic storm

[marmar]

Leading article: Britain bears the full force of an economic storm
Zero growth leaves ministers with no room for manoeuvre

Saturday, 23 August 2008




Given the waves of dire economic news that have been breaking over us in recent months, the latest bulletin from the Office for National Statistics hardly comes a surprise. But there is nevertheless something sobering about the confirmation from the ONS that economic growth in Britain has now ground to a halt.

For the first time since 1992, our economy has ceased to expand. Some might argue that this is not such a disaster; that after such a prolonged period of expansion we can afford to slow down. But the flaw in this sanguine analysis is that we do not seem to be in for a soft landing. The speed at which growth has fallen away indicates that this journey is likely to end in recession. The economic implications are going to be significant. Businesses will go bankrupt. Many will lose their jobs. We will all feel poorer.

But just as significant will be the political implications. When he was chancellor, Gordon Brown made a great show at Budget time of pointing out that the economy had grown in every quarter in which he had been in the job. Having eagerly taken credit in the good times, Mr Brown cannot escape some of the blame now that conditions have turned nasty. Indeed, the worse things get, the more questionable his stewardship of the economy over the past decade begins to look.

The blame for the global credit crunch and the recent increases in commodity prices cannot reasonably be laid at the door of the Government. But the strategic economic decisions taken by ministers in recent years are beginning to look rather dubious now, in particular the encouragement of our national reliance on the earnings of the financial services and housing sectors. Not so long ago, Mr Brown and his successor as Chancellor, Alistair Darling, were arguing that Britain would weather the storms of the global financial crisis better than other countries. In fact, it turns out that our economy is actually more vulnerable than the economies of many of our neighbours thanks to our heavy national indebtedness. .......(more)

The complete piece is at: http://www.independent.co.uk/opinion/leading-articles/leading-article-britain-bears-the-full-force-of-an-economic-storm-906473.html

[northernlights]

1. dam

they could be writing about us!