With turbulent equity markets, gloomy news on jobs and more than 10% of town and city centre shops vacant, it is still difficult to see how we can avoid the dreaded “double-dip”. Against this backdrop Flatline George (Osborne) has sagely observed that politics, rather than economics, represents the biggest barrier to economic recovery. Hardly surprising that I would agree with that statement, as I have said elsewhere in this blog that our political class is made up of (at best) well meaning amateurs. Of course, Osborne meant all those other politicians – especially those in mainland Europe who are dragging us down with their weak Eurozone economies.

There is no denying the seriousness of indecisive economic leadership in the Eurozone and in the US. The farcical behaviour of US politicians over raising the debt ceiling and ostrich like behaviour in Europe towards making more fundamental changes to the structure of the Eurozone (to strengthen and stabilise the currency and its prospects) has been little more than terrifying. Whilst some of the right decisions have been made and for the moment at least, things are a little quieter, the underlying economy remains essentially unchanged. Equity markets will continue on their roller-coaster ride and further drastic interventions in individual economies will be essential in the coming months.

Playing the blame game rarely helps and there is an element of that game-play in the finger pointing towards Europe. The problems and impact of our neighbours’ economies cannot be undervalued but should not be used as a smoke screen for the realities of our
own plight. Our living standards in the UK are destined to fall by as much as 25% over the next quarter-century. This is inevitable with the shift in economic power from West to East. Our expectations must not be “don’t worry, in five years time this will all be a distant memory”. Further support for enterprise and developing a more globally aware enterprise culture are still key for the UK recovery, if we are to meet even these muted expectations for our living standards. Increasingly, the balance between the Government’s debt reduction programme and continued weak economic growth is looking erroneous; if “plan A” is restricting the prospects for growth, “plan B” must be revealed and have at its core
enterprise start-up and growth.