IMF downgrades UK growth forecast
ECONOMISTS have raised worries over growing private debt and depressed growth as austerity policies and Brexit uncertainties continue to mount.
The Bank of England has told banks and credit card companies that it will take action over a “spiral of complacency” that is pushing up private consumer debt and endangering the stability of the economy. The UK central bank fears that wreck less loaning practices are adding to the problem, which is also being fuelled by falling wages and other incomes.
The warnings come as the International Monetary Fund (IMF) downgraded it’s expectations for growth in the UK economy from 2 per cent by the end of the year to 1.7 per cent - the largest downgrading of any advanced economy. The move comes after lower expected growth in the first quarter of 2017 of just 0.2 per cent.
“The IMF downgrade in UK growth forecasts is another worrying sign of the damaging impact that the Tory extreme Brexit is already having on the UK economy – before we have even left the EU.” Kirsty balckman MP
Writing on his Tax Research blog, economist Richard Murphy said Bank of England chief Mark Carney “should be” worried about escalating problems in the UK economy - but that a necessary change in UK Government strategy wasn’t being sought.
He said: “If there is a personal debt crisis it has developed on Mark Carney’s watch. Where is the mea culpa for failing to put appropriate measures in place to stop it developing? The signs have been there for some time, as I, amongst many others, have noted.
“Why isn’t the Bank being blunt in saying that the solution to this is to be found in fiscal policy, led by government investment that would boost real economy, actively increase productivity and drive up wages?”
“It seems to me that the Bank of England is worried, as it should be. My concern is that it’s worried about the symptoms and not the causes and as a result is looking for solutions in all the wrong places.”
The latest bad news for the UK economy comes after months of concerns about it’s deteriorating condition, as much of the world economy has experienced a modest growth spirt.
Economists and opposition parties have accused the Tory government of fostering the situation through a mixture of austerity measures and Brexit uncertainty.
Earlier this month new figures showed that the Scottish economy was fairing better than the UK economy as a whole, growing by 0.8 per cent in the first quarter, but still lagging behind most of Europe.
Commenting on the IMF downgrading Kirsty Blackman MP, SNP Economy spokesperson, said: “The IMF downgrade in UK growth forecasts is another worrying sign of the damaging impact that the Tory extreme Brexit is already having on the UK economy – before we have even left the EU.
“The Tory government’s disastrous plan to rip us out of the world’s largest single market and customs union is by far the biggest threat to our long-term prosperity, with the potential to cost Scotland up to 80,000 jobs and £11.2 billion per year – hitting family incomes and living standards across the country.”
Picture courtesy of Jonny White
Look at how important CommonSpace has become, and how vital it is for the future #SupportAReporter