OECD forecasts provide yet more evidence that supply-side reforms are urgently needed
22 November 2022
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Press Release
22 November 2022
In the Media
Julian Jessop writes in The Telegraph
23 November 2022
Housing and Planning
Responding to OECD forecasts that the UK economy is set to contract by 0.4% in 2023, IEA Head of Public Policy Matthew Lesh commented:
“The OECD’s latest forecasts are extremely grim reading for the United Kingdom. The only G20 country with a worse economic outlook in their forecasts is Russia, which is suffering under the strain of immense global sanctions.
“It is notable that a key reason for this dire prediction is the energy price guarantee, which despite reducing headline inflation will increase spending elsewhere, resulting in higher interest rates and a bigger slowdown in activity.
“There is still no need to rush to judgement: economic forecasts should always be taken with a pinch of salt. These models are best guesses, not fortune telling. Economies are complex and outcomes are impossible to predict.
“Nevertheless, these forecasts add to a growing body of evidence showing the desperate need for economic reform to boost Britain’s economic potential. Economic shocks from the pandemic and invasion of Ukraine may explain the current slowdown, but there are significant underlying factors behind the UK’s slow growth over recent decades.
“The new Prime Minister and Chancellor need a radical plan to reform the supply side of the economy and to boost the ability of entrepreneurs to innovate and build businesses. This means significant reforms to the planning system, to enable the building of more homes, infrastructure, factories, labs and offices. It also means aggressively reviewing and reducing cumbersome red tape that holds back British businesses and reforming the heinously complex tax system.”
ENDS
Notes to editors
Contact: media@iea.org.uk / 07763 365520
IEA spokespeople are available for comment and interview
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
“The OECD’s latest forecasts are extremely grim reading for the United Kingdom. The only G20 country with a worse economic outlook in their forecasts is Russia, which is suffering under the strain of immense global sanctions.
“It is notable that a key reason for this dire prediction is the energy price guarantee, which despite reducing headline inflation will increase spending elsewhere, resulting in higher interest rates and a bigger slowdown in activity.
“There is still no need to rush to judgement: economic forecasts should always be taken with a pinch of salt. These models are best guesses, not fortune telling. Economies are complex and outcomes are impossible to predict.
“Nevertheless, these forecasts add to a growing body of evidence showing the desperate need for economic reform to boost Britain’s economic potential. Economic shocks from the pandemic and invasion of Ukraine may explain the current slowdown, but there are significant underlying factors behind the UK’s slow growth over recent decades.
“The new Prime Minister and Chancellor need a radical plan to reform the supply side of the economy and to boost the ability of entrepreneurs to innovate and build businesses. This means significant reforms to the planning system, to enable the building of more homes, infrastructure, factories, labs and offices. It also means aggressively reviewing and reducing cumbersome red tape that holds back British businesses and reforming the heinously complex tax system.”
ENDS
Notes to editors
Contact: media@iea.org.uk / 07763 365520
IEA spokespeople are available for comment and interview
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
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