Economic recovery 'is out of the government's hands'

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Economic recovery 'is out of the government's hands'

Fri 29th May 2009

There is nothing more the government can viably do to speed up economic recovery in the UK, it has been claimed.

This is due, among other things, to the high level of borrowing currently occurring in the country, said Vicky Redwood, an economist at research consultancy Capital Economics.

She explained that "it's broadly agreed" that the government "can't do anything more to support the economy".

Standard & Poor this week revised its economic outlook on the UK from negative to stable, based on the premise that the country's net general government debt burden is likely to approach 100 per cent of GDP and remain this way in the medium term.

Ms Redwood believes that the downgrading "increases the pressure on the government to set out a medium to long-term plan for reducing public borrowing".

Earlier this month, the Bank of England Monetary Policy Committee announced that it is retaining the current base rate of 0.5 per cent.

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