Economics
Bloomberg View: Why Austerity in Britain Has Run Its Course
To boost growth, the Iron Chancellor needs to loosen his grip
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The bad news never stops for U.K. Chancellor of the Exchequer George Osborne. On Dec. 5, he had to announce that economic growth this year will fall below zero and the country’s debt will go on rising as a share of the economy even longer than he had pledged.
Osborne’s midyear budget statement was the moment for him to relax austerity and introduce convincing measures to stimulate the anemic levels of investment and growth that now threaten long-term damage to the economy. Unfortunately, Osborne continued to play the role of Iron Chancellor, arguing that to loosen fiscal policy now would spook markets, drive up the U.K.’s low borrowing costs, and put it on “the road to ruin.”