Hate to say I told you so… but sadly in this case, I told you so! Things are getting increasing gloomy in the economy – you only have to look at the latest ‘terrible’ unemployment figures (I did say previously that the private sector wouldn’t be able to soak up the public sector fall out – people were fooled with the lag effect from the Government first announcing austerity measures and the reality of when it kicks in), depressing manufacturing data and stagnant house prices to see that we’re not getting out of this mess any time soon. Additionally, the Euro zone crisis is hanging over us like a dark spectre.
So what are the powers that be doing about it? Well whilst acknowledging that the unemployment statistics were ‘disappointing’ David Cameron has firmly rejected criticism and said that he would stick to his plans to reduce the deficit of nearly 10%.
So what now Mr Mainwaring? Leading economists have called for George Osborne to announce a job-creation package in his Autumn Statement next month as they are concerned that the latest £75 billion quantitative easing scheme is unlikely to transform the county’s economic prospects.
The Chancellor will be of course reluctant to do this as the plan has delivered ‘record low interest rates’ and in altering his course may upset the ratings agencies who may then look again at Britain’s credit rating. Mr Osborne also has the added concern that public sector borrowing has increased sharply, higher than economists had expected and is therefore likely to miss his targets for cutting Britain’s deficit. But maybe that’s a gamble we should take at this stage.
It really is a fine balance. In my view I think the Government should be a little more flexible and show that it is willing to listen, be less rigid in its approach and consider other options. We need to bring back some consumer confidence fast.
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