Thursday, 11 August 2005

Economic "slowdown"

The Bank of England released its Quarterly Report yesterday.

The Governor, Mervyn King, stated that GDP growth would be lesser than the B of E's previous prediction after this year Budget. The Bank believed economic growth would be 2.6% in 2005. However they've lessened their figure to 2%.
This is largely because of the dip in consumer spending, plus a subdued housing market.

Gordon Brown's prediction for GDP growth this year was 3%. I'm no economist, but surely such a figure is overly optimistic!

To be fair, such a slowdown is probably not Brown's (or the Labour government in general) fault. House prices had been rising for some time and the likelihood of a fall may have become greater. Even though economic growth may not be at its optimum, the UK economy is still healthy. Unemployment and inflation are both low. If GDP growth in 2005 is only 2%, then it would still be higher (according to current projections) than that of most other G8 nations.

Of course, Brown should not seek to place extra regulations and taxation on business during this time. A libertarian government would repeal all business taxation and greatly reduce regulations on business. Businessowners of all types (and probably not just small businesses) have for years been crying out for fewer regulations. It's time that British government's started to listen to them.