Wednesday marks the halfway stage for the current U.K. governmentâ€™s five-year term, and Chancellor of the Exchequer George Osborne is facing decidedly mixed feedback on his stewardship of the economy ahead of his so-called Autumn Statement next month, seen as an interim budget.
The Conservative Party, the senior coalition partner, has traditionally been viewed as pro-business, but is coming under fire from businesses frustrated at the countryâ€™s second round of recession this year.
The program of quantitative easing instituted by the Bank of England (BoE), and backed by the government, appears to be having less impact the further it advances, as BoE Governor Sir Mervyn King highlighted last month.
Economic indicators for industrial production in September and manufacturing and retail sales in October suggest that the outlook for growth remains weak, despite the U.K. moving out of recession in the third quarter of 2012.
The job market has been one consistent bright spot for the country.
Public sector borrowing figures indicate that as tax revenues have declined, public sector debt is likely to come in higher than expected for the first half of the fiscal year 2012-13 â€“ even as growth has disappointed.
The effects of the much-vaunted â€œFunding for Lendingâ€ scheme, where U.K. banks are given access to cheap credit in the hope that it will be passed on to businesses, have yet to be felt.
Economists at Goldman Sachs suggest a â€œPlan A-â€œ for the country. The alternative to Osborneâ€™s â€œPlan Aâ€ would involve sticking to existing targets, and continuing plans to tighten fiscal policy, but allowing the debt target to slip.
John Longworth, director general of business group the British Chambers of Commerce, said that the government â€œhas been high on promises, but so far, low on delivery.â€
â€œAction needs to be taken immediately if we are to see the export-led recovery the government has been calling for, and investment in the U.K.â€™s crumbling infrastructure would allow businesses to transport their goods and people around the world.
Via – CNBC
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