Financial Times (April 27)
The UK’s economy remains fragile. GDP rose by 0.5% in Q1 of 2011, but it had fallen by that amount in Q4 of 2010: “Output stands where it did last September.” Cuts associated with the Government’s austerity budget are just beginning to take effect, leading to concerns of a double dip. Will the economy have the momentum to power through these cuts? It could go either way. “The Bank of England should not tighten monetary policy soon.” Moreover, Chancellor George Osborne must be flexible about changing “tack if things go awry” and, for instance, utilizing tax rebates or infrastructure projects to stimulate the economy. The Financial Times believes the odds need to be stacked in the economy’s favor because “China is spluttering, the eurozone remains vulnerable and the banking system is not fixed.”
The UK’s economy remains fragile. GDP rose by 0.5% in Q1 of 2011, but it had fallen by that amount in Q4 of 2010: “Output stands where it did last September.” Cuts associated with the Government’s austerity budget are just beginning to take effect, leading to concerns of a double dip. Will the economy have the momentum to power through these cuts? It could go either way. “The Bank of England should not tighten monetary policy soon.” Moreover, Chancellor George Osborne must be flexible about changing “tack if things go awry” and, for instance, utilizing tax rebates or infrastructure projects to stimulate the economy. The Financial Times believes the odds need to be stacked in the economy’s favor because “China is spluttering, the eurozone remains vulnerable and the banking system is not fixed.”
