Back in November 2010, we reported on Bank of England Governor Mervyn King's theory that we could be at
the start of a "sober decade"
("savings, orderly budgets, and equitable re-balancing."). One year on,
King's prognosis appears accurate.Indeed, we could well be in for a period of long-haul austerity.
At the last minute, David Cameron ditched a passage from his Conservative Party Conference speech last month, which would have urged the UK population to balance their books, just as the Coalition Government says it is seeking to balance the UK economy's books.
The BBC's Robert Peston argues that Cameron abandoned these words as they would be tantamount to a call for low growth. Peston says that if UK households "continue[d] to pay back their debts, it is very difficult to see how the economy [could] grow at much more than 1% or so per year for many years to come."
It appears possible that the UK economy could be on course for long-haul austerity - perhaps even for permanent austerity in our lifetimes. Writing in the Guardian, Steven Toft notes that the inevitable rise in "age-related public spending" over the coming decades means that the only real alternative to prolonged austerity would be if the UK populace suddenly developed an "appetite for much higher taxes."
Unsurprisingly, this is unlikely to materialise.
Indeed, there is a growing sense of public impatience with economic austerity measures, reflected in the public sector unions' first nationwide "day of action," which takes place at the end of this month (Wednesday 30 November 2011).
UPDATE 1 (Tuesday 22 November 2011): 'Austerity is the new normal,' says Reform
The Coalition Government's programme of economic austerity measures to cut the UK budget deficit and rebalance the economy should be a decade-long project, according to the Reform think tank. In a new report entitled The Long Game: Increasing UK Economic Growth, Reform argues that "austerity is the new normal."
Indeed, there is a growing sense of public impatience with economic austerity measures, reflected in the public sector unions' first nationwide "day of action," which takes place at the end of this month (Wednesday 30 November 2011).
UPDATE 1 (Tuesday 22 November 2011): 'Austerity is the new normal,' says Reform
The Coalition Government's programme of economic austerity measures to cut the UK budget deficit and rebalance the economy should be a decade-long project, according to the Reform think tank. In a new report entitled The Long Game: Increasing UK Economic Growth, Reform argues that "austerity is the new normal."
- For further analysis, see: XpertHR economic commentary November 2011: For a few billion pounds more.
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