FXstreet.com (Barcelona) - In a recent article in the FT former, US Treasury Secretary Lawrence Summers warned of a ‘lost decade’ for the UK economy as a result of the ‘aggressive fiscal consolidation’ being implemented. Much of the debate around UK ‘austerity’ no longer seems to be anchored in reality.
The fiscal consolidation to date has been modest and current plans do not entail any significant pick-up in the pace of tightening until the 2014-15 FY. The pace of deficit reduction is moderate given the size of the UK deficit – among the largest in the OECD. “Moreover, the pace of the actual and projected deficit reduction is similar to the OECD average (and much more benign than what is being undertaken by euro area periphery economies), so it would be misleading to present UK policy as being unusual or relatively aggressive.” writes Economist Ross Walker at RBS.
The fiscal consolidation to date has been modest and current plans do not entail any significant pick-up in the pace of tightening until the 2014-15 FY. The pace of deficit reduction is moderate given the size of the UK deficit – among the largest in the OECD. “Moreover, the pace of the actual and projected deficit reduction is similar to the OECD average (and much more benign than what is being undertaken by euro area periphery economies), so it would be misleading to present UK policy as being unusual or relatively aggressive.” writes Economist Ross Walker at RBS.
