Two thirds of economists say Coalition austerity harmed the economy

The Treasury’s own forecaster, the Office for Budget Responsibility, estimates that Government’s austerity was a drag on GDP growth in these years

A host of eminent economists have given a thumbs-down to the Coalition’s controversial austerity policies in a major new poll.

Of 33 economists surveyed by the Centre for Macroeconomics two thirds disagreed with the proposition that the Government’s policies since 2010 have had a “positive effect” on the economy.

“Premature austerity has damaged UK welfare and as I and others argued at the time, delaying consolidation would have left the UK in a much stronger position than it is today” said John Van Reenen of the London School of Economics. “The only interesting question is how much GDP has been lost as a result of austerity” said Simon Wren-Lewis of the University of Oxford.

Richard Portes of the London Business School said the UK’s recovery since 2013 was a consequence of the Government’s easing of austerity. “The recovery is aborted immediately after austerity begins, then [there is] revival when it is (semi-covertly) relaxed” he noted.

Official figures yesterday showed the economy grew by 2.8 per cent in 2014, the strongest rate of expansion since 2006. But GDP growth collapsed in 2011 in 2012. The Treasury’s own forecaster, the Office for Budget Responsibility, estimates that the Government’s austerity was a drag on GDP growth in these years.

However some economists in the survey highlighted the potential consequences of the Coalition failing to make spending cuts. “It all depends on whether slower consolidation would have led to a loss in market confidence or not” said Sir Charles Bean, the former deputy governor of the Bank of England. Government ministers said that without George Osborne’s 2010 emergency budget, when he accelerated the pace of deficit reduction, the UK would have faced soaring interest rates in the manner of Greece.

“I agreed with the initial plan, but thought it should have been relaxed sooner than it was, given that it was soon clear we would not be ‘like Greece’ ” said Tony Yates of the University of Bristol

http://www.independent.co.uk/news/business/news/two-thirds-of-economists-say-coalition-austerity-harmed-the-economy-10149410.html

Bet they wouldn't have signed that letter lol! After all, the Tories hadn't bribed them with peerages etc.

Yeah, for the life of me I can't see how anybody would figure that pulling money out of the economy would grow it. That's pretty much how you do the opposite.

I know, I know, debt. But you don't pay down debt during rough economic times; you do it in times of plenty. It's as stupid as a two-income household deciding that when one earner loses their job, that's the time to pay off all the credit cards.

Britain’s GDP grew faster than any other of what the International Monetary Fund (IMF) calls “major advanced economies”—the other G7 economies—last year. That’s according to the IMF’s figures.
These may actually understate the UK’s lead, because the UK’s GDP for 2014 was revised up to 2.8% yesterday from 2.6%. The IMF comparison is based on the 2.6% figure. Figures for other countries, such as Canada, have been revised and so differ from the IMF figures too. But these differences don’t change the UK’s ranking: even by the lower estimate of 2.6% the UK would come out on top.
GDP growth for other large economies such as India and China is somewhat higher. Their growth consistently outstrips those of ‘advanced’ economies but they’re not generally considered comparable to the likes of the UK and Germany.
The UK’s recent growth comes after a period of slow recovery compared to other large nations and overall growth since the pre-recession peak is still behind that of some of the other major advanced economies.



https://fullfact.org/economy/uk_fastest_growing_gdp_major_economy-41159