Thursday, 9 September 2010

An opportunity for a better way

Larry Elliott points out that current economic indicators are so poor that Osborne has been presented with an opportunity to rethink bizarre and dangerous coalition strategy:

"the world economy is clearly slowing; both the OECD and the International Monetary Fund are now warning against over-aggressive tightening of policy; Britain's economy is both unbalanced and weakening; and in less than six weeks' time the government is planning to announce the biggest programme of spending cuts since the 1930s. Osborne has now been given a perfect excuse for moderating his plans. If he carries on regardless, he risks making the biggest economic blunder since John Major took Britain into the Exchange Rate Mechanism".

Osborne could reasonably (Osborne, reason? I know I know) argue that since the emergency Budget was announced in June, the economy has deteriorated to such an extent that austerity must be postponed. Probably safe to assume that the media would largely overlook the causation i.e. the Budget is principally to blame for collapsing confidence. That he won't pursue such a strategy confirms (again) the fundamentally ideological nature of the cuts.

Stephen Boyd

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