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IMF says Britain must relax austerity if eurozone crisis escalates
StevieJ
Posts: 20,174 Forumite
I can anticipate the replies, along the lines of 'What austerity' 
Has Ed Balls moved jobs 
or is the French view shining through?
Has Ed Balls moved jobs or is the French view shining through?
http://www.telegraph.co.uk/finance/economics/9281686/IMF-says-Britain-must-relax-austerity-if-eurozone-crisis-escalates.htmlThe IMF said in its annual review of the UK that Britain should prepare a Plan B of temporary tax cuts and increased infrastructure spending as the best way to support the economy should the eurozone crisis escalate.
"Fiscal easing and further use of the government’s balance sheet should be considered if downside risks materialize and the recovery fails to take off.
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
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You must be a Labour party card carrying socialist if you don't think the current conservative policy is the answer.IMF says Britain must relax austerity if eurozone crisis escalates
Here's the IMF report
http://av.r.ftdata.co.uk/files/2012/05/UK-IMF.pdf0 -
Inevitable.
You can't cut your way out of a recession.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Good governments use recessions to cut back on profligacy and invest in the future.
Unfortunately, our socialist media and lack of a true conservative (small c) party make this impossible.The J is a Financial Advisor-This site doesn't check anyone's status and as such any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Always seek professional advice.0 -
So maybe they will postpone the benefit cutsd and cap yet again?The thing about chaos is, it's fair.0
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So maybe they will postpone the benefit cutsd and cap yet again?
What,:think: like reducing VAT and fuel duty"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
You must be a Labour party card carrying socialist if you don't think the current conservative policy is the answer.
Here's the IMF report
http://av.r.ftdata.co.uk/files/2012/05/UK-IMF.pdf
2. But the economy has been flat. The hand-off from public to private demand-led growth has not fully materialized......
5. Risks are large and tilted clearly to the downside. Setbacks in the euro area are the
key risk to economic prospects and financial stability in the UK as trade and financial links
are substantial. An escalation of stress in the euro area could set off an adverse and selfreinforcing
cycle of lower confidence and exports, higher bank funding costs, tighter credit,
and falling asset values, resulting in a substantial contractionary shock......
Are key elements too.
They also suggest more QE and lowering of BOE rate to <0.5%........"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
It's Ed Balls fault or we could blame Gordon Brown.grizzly1911 wrote: »2. But the economy has been flat. The hand-off from public to private demand-led growth has not fully materialized......
5. Risks are large and tilted clearly to the downside. Setbacks in the euro area are the
key risk to economic prospects and financial stability in the UK as trade and financial links
are substantial. An escalation of stress in the euro area could set off an adverse and selfreinforcing
cycle of lower confidence and exports, higher bank funding costs, tighter credit,
and falling asset values, resulting in a substantial contractionary shock......
Are key elements too.
They also suggest more QE and lowering of BOE rate to <0.5%........0 -
Then why is there all this talk about cutting council tax benefit?The thing about chaos is, it's fair.0
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Interesting parts of the report
1. Current policies are aimed at assisting economic rebalancing and financial sector stability. Strong fiscal consolidation is underway and reducing the high structural deficit over the medium term remains essential.
2. But the economy has been flat. The hand-off from public to private demand-led growth has not fully materialized. Much of this underperformance relative to earlier expectations is due to transitory commodity price shocks and heightened uncertainty following the intensification of stress in the euro area.
So, governments current priorities and course of action are correct, the "recession" is caused by commodity prices and Euro crisis, not because of austerity.
We should only be looking to economic stimulus if the UK enters a much deeper recession caused by the Euro crisis.
All sounds pretty sensible to me.Faith, hope, charity, these three; but the greatest of these is charity.0 -
HAMISH_MCTAVISH wrote: »Inevitable.
You can't cut your way out of a recession.
Can depend on what caused the recession in the first place.0
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