Is there any way back to growth?

The government is coming under more and more fire to do something to turn round Britain’s ailing economy. So far everything that has been thrown at the problem – save actually forking out money – doesn’t seem to have worked. Not quantitative easing, not entrepreneur incentives, not employer National Insurance contribution holidays and certainly not public-sector spending cuts.

The private sector is still fragile: the nation’s SMEs have not yet seized the nettle in terms of leading the country out of recession with a much-hoped-for ‘export-led’ recovery (the government was probably dreaming with this idea, in truth). Meanwhile, bigger companies are sitting resolutely on their cash piles, continuing to shave millions off their cost bases and piling up their reserves for that rainy day that hovers continually on the horizon in the shape of another banking collapse. Meanwhile, the government’s borrowing is growing, not shrinking – despite what the majority of the public thinks.

This week, I have been wracking my brains, trying to think of what I would do if I were the government. Is there any way back to growth? Saving hasn’t worked. Spending seems a dangerous way to solve the problem given how it arose in the first place and the likely reaction of the capital markets.

Unfortunately, the only conclusion that I have come to is that we are essentially helpless, a prisoner of the crisis in the eurozone until the illusion that is the single currency is finally ripped apart. The uncertainty that exists is paralysing us all – countries, companies and individuals. Until that crisis is really, properly concluded, or else another region replaces the eurozone as our main trading partner, I don’t think the pain will end. Sorry.

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