Wednesday, 27 July 2011

They're going to borrow more than Labour

When Labour left office in 2010 growth in the economy was 1.2% for the second quarter, 2011 has seen 0.2% growth in the same period.

By this time in 2010, borrowing was already £1.8 billion below 2009 borrowing; the borrowing numbers reported last week show borrowing only managed to fall by £370 million so far this year.

From the Office of Budget Responsibility’s estimates it could be projected that if growth for fiscal 2011 is below 1.1% then we could be in a situation where the CONDEM coalition is borrowing more than Labour.

With confidence at a low point, this will mean stagnant growth and will keep the deficit too high, with levels of borrowing higher under Labour, this will continue the collapsing confidence in both the business and consumer sectors.

In the last quarter production contracted 1.4% from the previous quarter, with mining and quarrying down 6.6%.

Agriculture declined by 1.3% while construction grew 0.5%, recovering after two weak quarters.

The CBI says "it's members are planning to cut jobs over the next three months and have revised down their investment plans for the year ahead," the business trade body said.

Manufacturers reported they were less optimistic than three months ago after a fall from +9% to -16% in the CBI index, the first fall in sentiment since July 2009.

The biggest drag on growth at the moment is inflation and that's eating into household disposable income and holding back consumer spending.

So the CONDEM governments policy of austerity is creating a cycle of lower growth, higher borrowing, this exasperated by VAT tax increases and National Insurance rises for employees and uncontrolled increases in fuel and food also increasing.

The current government have no strategy for growth, with some regions of the country are in recession, we have a government cutting taxes for large corporations, cutting benefits for the poorest and ignoring tax evasion by the wealthiest, we have a cronic housing problem with a million young people unemployed, we have a government with the wrong priorities, this needs to change.

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