To mis-quote Miliband, the government is following the wrong policy at the wrong time. A fall in output of 0.5% of GDP in the last quarter is probably artificially low due to some snow and in general early estimates of GDP figures can be flaky. Having said that this was before the VAT rise, the petrol price hikes and the government’s cuts agenda really started to bite.
Along with other economic indicators, like retail sales, service sector stagnation and don’t forget unemployment going up this is a real worry.
It is time for a change of approach by the Conservative-led government. Any sensible government allows for changes of circumstances. Now, while many economists have been predicting that the Osbourne approach will cause problems, surely even Osbourne can see that today’s figure indicate that the recovery is more than fragile, it’s being stifled. In fact if there is another quarter of ‘negative growth’ we will be ‘officially’ in recession.
We only need to look over the water at Ireland. We do not want to end up in the same boat as them. Unfortunately Osbourne did think only a year ago that Ireland were doing the right thing. Lets hope he has learnt something since then. It’s a sign of strength not weakness to change course when you are heading in the wrong direction.
Other wise we will all be the losers.