A flatlining economy is little to cheer
10 February 2023
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Commenting on today’s GDP figures, which showed the UK economy narrowly avoided recession in 2022, Julian Jessop, Economics Fellow at the Institute of Economic Affairs, said:
“These figures are an important reminder not to pay too much attention to official forecasts. But they are still little to cheer.
“The level of economic activity in the UK is still 0.8 per cent below where it was before the pandemic struck. Even more worryingly, this followed a decade of stagnant productivity and weak growth in the wake of the global financial crisis.
“This has been a period when the state has continued to take an even bigger role in the economy, with clumsy interventions in key sectors such as energy and financial services, and the tax burden has climbed to a new record high. Public spending already accounted for around 40 per cent of GDP before the pandemic and is set to remain well above that level.
“The government should therefore refocus on doing less – rolling back the state and cutting taxes – but also doing what it does much better. Public services, notably health and social care, need fundamental reform if they are going to deal with the huge challenges posed by an ageing population.”
ENDS
IEA spokespeople are available for live and pre-recorded broadcast
Contact: media@iea.org.uk / 07763 365520
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.
“These figures are an important reminder not to pay too much attention to official forecasts. But they are still little to cheer.
“The level of economic activity in the UK is still 0.8 per cent below where it was before the pandemic struck. Even more worryingly, this followed a decade of stagnant productivity and weak growth in the wake of the global financial crisis.
“This has been a period when the state has continued to take an even bigger role in the economy, with clumsy interventions in key sectors such as energy and financial services, and the tax burden has climbed to a new record high. Public spending already accounted for around 40 per cent of GDP before the pandemic and is set to remain well above that level.
“The government should therefore refocus on doing less – rolling back the state and cutting taxes – but also doing what it does much better. Public services, notably health and social care, need fundamental reform if they are going to deal with the huge challenges posed by an ageing population.”
ENDS
IEA spokespeople are available for live and pre-recorded broadcast
Contact: media@iea.org.uk / 07763 365520
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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