On the IEA blog, Professor Tim Congdon has listed five reasons why the future trend rate of growth might be closer to 1.5%pa than the 2.5%pa that has been typical of the post-war period:
- Slower labour force growth and the steady retirement of the baby boom generation.
- The bigger role played by the public sector in the UK economy and its weaker productivity record.
- Higher taxation – particularly on high earners and capital.
- The "apparent rush for high-cost and wasteful renewable energy sources".
- "Regulatory pressure on the banking industry will increase the cost of bank finance".