You can picture Miliband and Balls high fiving. Vindication. Their mantra of “cutting too far, too fast” now has the ring of truth.
Bombshell. The UK is in its first double-dip recession since the 1970s.
April started with positive news. Service sector employment rose at its fastest rate for four years and manufacturing hit a ten month high.
It looked like disaster had been averted. But only a month later and the worst construction data since the snow storms of 1963 has subsumed it all.
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Not many saw it coming. You can bet though that commentators and investment managers will now be scrambling to highlight their secondary concerns about the Eurozone, fiscal austerity and higher oil prices.
For all the fuss, the event has a deeper significance. As the economy burns, so too politics will catch fire.
You can picture Miliband and Balls high fiving. Vindication. Their mantra of “cutting too far, too fast” now has the ring of truth.
Yet wouldn’t the UK be in a worse position if we’d kept spending? Look at what is happening elsewhere: Spain is cutting 2.5% this year and has 24% unemployment, Greece is slashing 6% and has 22 % unemployment.
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Sure, we’re not at their levels of despair, but there is a threat to our credit rating and thus tightening at 1% per annum seems reasonable. Either way, the Coalition is coming apart. If it’s not the fuel crisis, it’s the budget. Labour has opened up its biggest lead since the general election and the Conservatives are taking all the flak.
Every disaster breeds opportunity, and Nick Clegg may just see this as his.
Read more by Freddy Barker
