CHANCELLOR Philip Hammond declared yesterday that the UK Government was “not complacent” when it came to the economy.
This is quite a statement. It implies there is some reason why complacency is a danger, somehow suggesting the economy is performing well.
Mr Hammond focused on the UK having “grown continuously for four-and-a-half years”, and declared: “We can be proud of that.”
However, these assertions rather sidestep the elephant in the room: the extreme weakness of growth. The UK’s growth rate has disappointed consistently since the Conservatives came to power in 2010. And things have gone from bad to worse since last year’s Brexit vote.
Mr Hammond offered his thoughts after official data yesterday showed the UK economy grew by just 0.3 per cent – less than half of its long-term average annual rate of expansion – in the second quarter. This followed first-quarter growth of 0.2 per cent.
A post-Brexit vote squeeze on household incomes, arising from a surge in inflation fuelled by sterling weakness in the wake of the decision to leave the European Union, has been and will continue to be a major drag on the economy.
And huge uncertainty over Brexit will keep on weighing on business investment.
Given all of this, worry rather than pride might be a more fitting emotion for the UK Government on the economy.
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