Jump to content
Join the Unexplained Mysteries community today! It's free and setting up an account only takes a moment.
- Sign In or Create Account -

UK economic 'miracle' a sham


questionmark

Recommended Posts

German team damn UK economic 'miracle' as a sham

By Ambrose Evans-Pritchard, International Business Editor

Last Updated: 4:15pm BST 22/10/2007

Britain's economic resurgence over the last fifteen years has been driven by record levels of household debt and a public spending spree that cannot continue, according a German-led team of economists.

In a damning new report "More Mirage than Miracle" published by the free-market think tank Policy Exchange, the analysts said Britain was relapsing into high-tax and high-regulation sclerosis just as the rest of Europe begins to shake itself out of statist lethargy.

The country's underlying slippage has been masked by a housing boom that creates a false sense of wealth and encourages people to over-spend by drawing cash from their homes.

The British are resorting to a Faustian Pact that leaves many of them with an ever greater debt burden.

"From 2001 to 2006, a total of £256bn in equity was extracted from UK property values in this way. Dependent as it is on rising house prices, housing equity withdrawl cannot continue to prop up our consumer spending at its current level," said the report.

The dramatic change in attitudes to debt has caused the UK savings rate to plummet from 8.3pc of disposable income fifteen years ago to around zero. Personal debt has risen by 137pc since June 1993 to £1,343bn, greater that annual GDP for the first time.

"Just as private households have been living beyond their means, so has the state. The expansion of the public sector artificially inflates GDP growth data: it cannot continue much longer.

"Judging by the fiscal deficit trend, the UK is now in worse fiscal shape than almost any other major Western country. In the event of an economic downturn, the UK now has little leeway for stimulus," it said.

The report was mostly written by two German economists: Holger Schmieding, chief Europe economist for Bank of America, and Policy Exchange's chief economists Oliver Hartwich.

"We're two Germans who came to Britain believing its was a free-market haven and we're disturbed by what we've found. This is the year when the state sector in the UK as a share of GDP rises above the level in Germany. It's shocking," said Dr Hartwich.

"The rest of Europe has been cutting taxes and pushing through reforms, and what has Britain done? The economy has in effect been been 'bailed out' by housing inflation and debt," he said.

Full story, Source: The Telegraph

------------------------------------------------------------------

Link to comment
Share on other sites

 
  • Replies 2
  • Created
  • Last Reply

Top Posters In This Topic

  • Moon Monkey

    1

  • stevewinn

    1

  • questionmark

    1

Popular Days

Top Posters In This Topic

I said a while ago, Brown has set Britain up for an almighty fall, people borrowing money hand over fist, people are living so far beyond their income that you could say the two are living separate lives. But what do you expect when Gordon Brown is stealing money from pensions and borrowing money left right and centre, The Labour government are taxing us more than ever and when a problem arises they just throw more money at the problem, a good example is last week Clostridium Difficile in hospitals was on the agenda and Gordon Brown promised 100 million to tackle the problem, C-Diff is easily controlled by basic hygiene and soap and water, so why on earth is Brown throwing 100 million at the problem.

Link to comment
Share on other sites

I said a while ago, Brown has set Britain up for an almighty fall, people borrowing money hand over fist, people are living so far beyond their income that you could say the two are living separate lives. But what do you expect when Gordon Brown is stealing money from pensions and borrowing money left right and centre, The Labour government are taxing us more than ever and when a problem arises they just throw more money at the problem, a good example is last week Clostridium Difficile in hospitals was on the agenda and Gordon Brown promised 100 million to tackle the problem, C-Diff is easily controlled by basic hygiene and soap and water, so why on earth is Brown throwing 100 million at the problem.

...and the subcontractors will be the lowest tender who then pay immigrants minimum pay to actually clean the hospitals and pocket the other 90 million. It is no surprise Britain is in so much debt, look at the prices we pay for almost everything compared to the rest of Europe or North America.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Recently Browsing   0 members

    • No registered users viewing this page.