Friday, July 22, 2011

Some austerity from matron............

With the UK economy mis-firing badly and Osborne's forecasts for growth looking way wrong (the Zarnowitz bounce having morphed into a very dead cat) Bill Martin of Cambridge University has produced a detailed report to try to explain why. Given that this will not be popular in the Govt perhaps he should make limited use of his mobile phone and internet connection.
Essentially he argues that "its the consumer, stupid" and that the austerity being imposed through altered credit conditions, taxation and the like have resulted in a massive loss of general confidence meaning that business is struggling to sell products and services to them. Whilst some austerity from matron behind the bikesheds followed by a cold shower is almost enjoyed by former public school boys this is clearly not the case for the UK consumer who has firmly shut the piggy bank.
The state clearly needs to be cut but there does not appear to be a plan for growth; without it we may be curing the cancer but also killing the patient.
As Earl Wilson wrote " if you think nobody cares if you're alive try missing a couple of car payments".