Low growth to become the norm over the foreseeable future

Daily Express quotes PhIlip Booth

In a speech at a building site in east London he attacked his Labour opposite number Ed Balls who had been arguing for more state borrowing to dig Britain out of recession.

Mr Osborne said his “Plan A” had worked, a reference to Shadow Chancellor Mr Balls’ repeated calls for a Plan B over the past three years.

The Chancellor said further cuts were the only way forward and warned Labour that “anyone who thinks those decisions can be ducked is not fit for Government”.

His cost-cutting mantra was backed by the right-leaning Institute of Economic Affairs think tank this morning, although it also cautioned Britons to expect a flat-lining economy of low growth to become the norm over the foreseeable future.

Latest output figures show the economy grew 0.7 per cent in the second quarter of this year and some predict the rate could reach 1-1.5 per cent by the end of December.

Rising house prices and buoyant retail sales have added to the mood of optimism.

However, the IEA’s Professor Philip Booth said: “We still have a long way to go before we recover the loss of output from the 2008 crash. “Furthermore, the medium-term prospects for growth do not look healthy unless the government determinedly reduces government spending and regulation.”

“The recovery since the financial crash has been the weakest in industrial history. 

“Many of the government’s critics wish to solve the UK’s growth problem by increasing government spending and borrowing. 

“Britain’s growth problem is a productivity problem and not a problem caused by insufficient government borrowing.”

Read the full article here

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