The question is not if but when and in what way Mr Osborne will have to put more stimulus into the economy as the pressure builds to reverse course. There is a question regarding who he will blame for the U-turn, which he will claim isn't one and was planned all along, even though it wasn't. The euro area is the top candidate, or maybe the Governor of the Bank of England who endorsed this policy. Infrastructure spending seems to be at the top of the agenda but that is unlikely to have much effect for a couple of years at least. Cuts to VAT and National Insurance seem the most likely candidates. Ed Balls is going to have a field day, saying he told everyone how this would work out, which he did.I am not so sanguine. We may have to wait for the autumn statement (in November). Meanwhile, the economy is going to the dogs.
05 June 2012
The sooner the better
Is Slasher Osborne for turning? Blanchflower in The Independent thinks so: