The Bank of England’s most recent prediction put the UK unemployment rate at 7.5pc by the end of 2020.Ĭonnolly warns in the US journal International Economy that officials seem “hell-bent on creating a new Depression and everything that might very well come with it.” The decision to knock away the props before the job is done now risks a chain of events akin to the 1930s. In which case, the lack of statecraft is simply breathtaking.īernard Connolly, doyen of British Wicksellian economists, said temporary furloughs have merely deferred a slump rather than preventing one. “The UK is facing a perfect storm,” he said.įor the Government to deliver such a contractionary shock on the eve of Brexit is surely to pile Mount Pelion upon Mount Ossa, unless your purpose is to discredit Brexit. The estimate of “fiscal drag” for this country is a staggering 7pc of GDP. Bruce Kasman of JP Morgan said the worldwide withdrawal of fiscal stimulus projected for 2021 amounts to 2.4pc of GDP, comparable to the “now-widely understood policy missteps in 2011-14 when fiscal austerity hindered recovery from the global financial crisis”.
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