Since the great recession, America’s economic recovery has been significantly stronger than our own. The British left hypocritically overlooks the fact that the benefits of US growth are grotesquely skewed towards the rich, but the question remains – why is UK growth noticeably weaker?
Adam Posen, a member of the Bank of England’s Monetary Policy Committee, runs through some of the obvious answers – America’s ability to delay fiscal retrenchment, differences in exposure to the Eurozone and the impact of inflationary shocks on the UK economy.
However, he expects most of these divergent factors to recede:
However, he does identify one key structural weakness that has hampered the British economy – and which, if unresolved, will continue to do so:
And the cause of this relative inefficiency?
Lack of competition. It’s funny how supposedly leftwing concerns – like reform of the banking system – often have rightwing solutions.