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Monday, February 13, 2006

UK economy in trouble

Blair and Brown have tried to make the UK economy look good by

1. bringing in lots of immigrants

2. creating lots of jobs in local and national government

3. making it easy for people to borrow lots of money.

Now it is clear that the economy is in trouble.

Larry Elliott, economics editor of The Guardian, on 13 February 2006, described the present state of the UK economy.

http://business.guardian.co.uk/story/0,,1708252,00.html

Some quotes:

Eight and a half years of Labour has seen the UK's industrial base shrink as a share of the economy to less than 16%.

~

The UK's deficit on goods hit £65bn last year, more than 5% of GDP.

~

Away from the capital (and, indeed, in pockets within it), the reality of modern Britain is lots of people doing fairly mundane jobs for low-ish wages in the service sector.

~

The surprise is not that voters in seats such as Dunfermline and West Fife have turned on the government, but that it has taken them so long.

The parts of Britain devastated by the Conservatives in the 1980s and early 1990s have seen the gap with the rich south-east widen since 1997.

~

In the years since the turn of the millennium, UK growth has been stronger than that in the eurozone for three reasons -

1. immigration boosted the working population,

2. consumers were willing to borrow against the rising value of their homes

3. and the government invested heavily in the public sector.

But at least two of those three sources of growth have now been switched off:

1. consumers have tightened their belts in the face of a flattening out of house-price inflation and a squeeze on real incomes,

2. and the government can no longer afford to continue spending at the rate it has been over the past five or six years.

~

Britain's export performance, by virtue of its weak manufacturing base and an overvalued currency, has been far weaker than that of Germany, Japan and the United States.




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1 comment:

WorldCTZen said...

Why not follow Uncle Sam and blame the Chinese?

 
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