Leading economists offer their predictions for how the UK can claw its way out of the fiscal mess ⬇️ 🔍 Analysis by DavidParsley50
The Government’s own
“The outlook for Britain’s economy in 2023 is terrible, with economic growth, wages, employment and investment all expected to fall, while taxes and interest rates rise” Harrop says. “However,” he adds, “the risks to this are to the downside. Indeed, the Bank of England and the OBR are notably predicting a much more severe downturn – although predicated on interest rates getting to over 5 per cent, while the EY Item Club view is that they will peak at around 4 per cent.”
“What we do know for certain though,” says MacDonald, “is the next year will be extremely difficult both on the growth and inflation fronts. The differences are of degree.”“Like the Federal Reserve, the Bank of England has substantially increased the money supply over many years, driving up asset prices for the rich and keeping zombie businesses alive,” he says.
“Inflation should ease significantly next year given the base effects from the war in Ukraine will likely be abating.”, agrees that world events are the key to whether or not we see some improvement next year. “It’s difficult to see any positives,” he says. “The Government has decided to continue the borrowing splurge until they get kicked out of office.
“The UK made its position worse because of Brexit,” says Lukasz Krebel, economist at the New Economics Foundation. “As for a Swiss-style deal with the EU, it is in fact hundreds of bilateral deals struck over the decades. Switzerland pays into the EU budget, follows EU laws and is partially in the single market. The EU is not keen on another such set up, and it’s difficult politically for the Government.
If Snowden’s prediction that the Tories are about to be “kicked out of office” turns out to be correct, then that’s an agenda Labour leader Keir Starmer will be steering well clear of. “Instead, it is raising taxes. But high taxes kill growth. They make life much harder for new, small, and growing businesses, which are the engine of growth and job creation. “Trying to tax yourself into prosperity is like standing in a bucket and trying to pull yourself up by the handle.”
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