Get ready for the austerity decade. [...] We've had what Mervyn King once called the NICE period of non-inflationary constant expansion but now we face a long DRAG - deficit reduction, anaemic growth.He argues that the coming decade will prove to be "payback time" for the 25-year boom period enjoyed by the global economy between 1982 and 2007. Perhaps more worryingly still, Elliott reminds us that "the structural weakness that caused the crisis remains untackled. We are living in a fool's paradise."
Therefore, as the latest overview of the economic outlook from XpertHR salary surveys notes, the 2010 general election (which Gordon Brown is later today expected to call for
Thursday 6 May 2010) is likely to mark a decisive turning point. The period of stasis and deferred decisions on what is to be done to ensure recovery will soon be over.
The Government and UK workers will be forced at last to confront the realities of the new economic landscape. At some point after the election, public spending cuts will hit employment and pay awards hard. And soaring inflation and sluggish economic growth could yet result in a return to stagflation.
Whichever party wins the 2010 general election, it is certain that they will have a real fight on their hands to ensure that economic recovery is sustained.