Wednesday, 28 January 2009

"Britain is best placed to weather the global crisis"

"Britain is best placed to weather the global crisis", so Gordon Brown and Alistair Darling repeatedly claimed until not long ago. So the news that the International Monetary Fund declared today that the UK's recession will be deeper than that of the US, Italy, France and others and that the British economy will contract by 2.8 per cent this year - the worst of any Western country - must come as a huge surprise to the dynamic duo. Alistair Darling has not yet said that his forecast that the UK economy will be growing again by the second half of this year is in need of major correction.

Meanwhile the Institute of Fiscal Studies (IFS) has reported that Britons are facing a £20billion a year "double whammy" of tax rises and spending cuts to get the public finances back into balance. The IFS also predicted that it would take until at least 2029 for government debt to return to levels seen before the current crisis. Tax increases and spending cuts were inevitable after the next election, regardless of who wins it. The IFS also said that the Treasury was over-optimistic about the pace at which Britain would bounce back from the recession, hold on I think I just covered that above...

So Gordon and Alistair, do you still think that "Britain is best placed to weather the global crisis"? Did you ever really believe it?

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