- UK domestic spending will increase by 1.5% p.a. in 2010, 2.5% p.a. in 2011 and 3% thereafter – sucking in consumer goods;
- The real price of imported food will increase at 2% p.a. from 2010;
- UK energy imports will rise as the volume of UK North Sea oil production falls by 7% p.a. from 2010.
The report recommends three main courses of action:
- Future reform of the financial sector should be designed to contribute to the export potential of this sector.
- In the case of manufacturing and knowledge-intensive services, there is scope for an 'industrial policy'.
- A further devaluation of sterling.
Without action, warn the authors, the UK deficit is likely to more than double from the 2009 rate of 2% of GDP to almost 5% in 2020.
Click here for a PDF of the full report.