We already know that the election campaign will be an argument between the Conservatives who claim that the Long Term Economic Plan must be stuck to in order to deliver results for Hard Working People – and the Labour Party who will say this complacently ignores the continued Cost Living Crisis. Allied to this will be the Conservatives heralding the return to economic growth while Labour will dismissively retort that the growth has been slow and derisory.
A fair minded British voter might feel that international comparisons could be of use in adjudicating over the dispute. Here there was some good news this morning for George Osborne, the Chancellor of the Exchequer, with a report from the OECD.
Among the comments in the report:
In the advanced economies, growth is set to be stronger in the United States and the United Kingdom than in the euro area and Japan. Unemployment will remain particularly high in the euro area….
Growth has picked up in the United States and the United Kingdom. In contrast, it has stagnated or declined in the largest euro area economies, reflecting persisting imbalances and heightened geopolitical tensions that have hit confidence. Japan has fallen into a technical recession, with activity adversely affected by the necessary consumption tax increase. The uneven recovery is expected to persist through to 2016….
Recent divergent economic performance in the main OECD areas is a continuation of the trends since the Great Recession. While the recovery has been universally sluggish, conforming to past experience of deleveraging after financial crises (BIS, 2014), the pace of recovery has differed. The United States and the United Kingdom have surpassed their pre-crisis GDP peaks, Japan has barely attained it, and the euro area as a whole is still below it, though there are considerable differences within the euro area countries….
In the United Kingdom, job growth remains robust, with the unemployment rate declining by around 1½ percentage points over the year to the third quarter of 2014….
In the United Kingdom, given the growth outlook, solid job growth is likely to continue and the unemployment rate is projected to decline to under 5½ per cent by 2016. Labour productivity (per person employed) which is estimated to have risen by around ¾ per cent during 2014, is projected to strengthen slowly, rising around 1½ per cent in 2016...
A faster-than-expected elimination of economic slack amid robust growth calls for a gradual normalisation of monetary policy and stronger consolidation to ensure sustainable economic growth. In light of the high budget deficit, and assuming the underlying momentum of the recovery remains strong, fiscal consolidation should accelerate, as planned, from less than ½ per cent of GDP in 2014 to about 1¼ to 1½ per cent of GDP per year in the coming two years.
Not all other Finance Ministers have such encouraging reports. As can be seen below.