The Institute for Fiscal Studies (IFS) has today painted a very gloomy picture on the state of UK finances in the years to come with a prediction that it will take 20 years for UK debt to return to pre crisis levels and that £20 billion worth of tax rises or spending cuts will be necessary to achieve the improvement in the public finances set out in the PBR.
This forecast is in effect confirmation of this campaign video released by the Conservatives two weeks ago in that future generations will be straddled with debt left behind behind by Gordon Brown and his incompetent Government. Despite the plethora of gloomy economic news including job losses and record numbers of house repossessions, Gordon Brown refuses to acknowledge that he hasn’t ended economic boom and bust, a point put to him at today’s PMQ’s by David Cameron.
The UK economy is now officially in recession after the release of growth figures this morning which show a 1.5% decline in GDP in the last quarter. This follows a drop in GDP in the previous quarter of 0.6% which means the official definition of two consecutive quarters of negative economic growth has been met.
The 1.5% fall is the largest since 1980 and shows what a perilous state the economy is now in. Gordon Brown refuses to accept that he has put an end to boom and bust but these figures make him look even more foolish when he continues to make claims that this recession is different to previous ones and that he is not to blame. The public won’t buy these feeble excuses. He was very keen to take credit for the ‘unprecedented growth’ as he put it of the UK economy during the first ten years of a Labour Government but is even keener to distance himself from the negative growth in the UK economy. When thousands of people are losing their jobs and their homes each week, it’s embarassing for the PM of this country to give interviews to the press and media and blame the United States and anyone else he can think of at the time and completely try and absolve himself of any blame for the current economic crisis. He should have the decency to be a little honest – but I suppose if he could he wouldn’t be Gordon Brown.
Just to make matters worse, the pound is trading at $1.35 this morning which is the lowest its been for about 25 years.
Latest unemployment figures show that 1.82 million people are out of work which is an increase of 140 000 in the three months to September. This is the highest figure since 1997 and is predicted to rise even further. Yesterday, several large companies such as Virgin Media, Yell, GlaxoSmithKline announced job losses totaling 5000 not yet included in the unemployment figures. The economy is shrinking and Brown’s claim of ending boom and bust looks sillier by the day.