Tuesday, 26 October 2010

Growth..good for the coalition...?

Tonight's economic headlines report a higher-than-expected 0.8% rise in UK GDP in the 3rd Quarter. Up pops George Osborne on all the bulletins claiming credit: we done it and what's more we saved the UK from being Greece MK2.

Is that fair, or even true?

The coalition was elected in May and had its first budget in late June, so any effect on the economy will not yet have taken effect. That being the case, and insofar as economic outcomes are determined by politics, any economic growth this year has to be an outcome of policies enacted and implemented by the last Labour government.

The effects of the coalitions June budget and last week's CSR will only be felt in the 4Q 2010 or even early 2011, and the measurements of any success/failure will not become clear 'till much later than that.

Tax Research UK has a good (if frightening) analysis....

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