Between 2005 and 2011 British household incomes have tumbled below those of rich-nation counterparts in Switzerland, Australia, Austria, France, Canada, Belgium and Sweden, according to a new analysis from the UK’s Office of National Statistics. Despite some decent recent news on industrial production, the UK economy remains quite weak. And critics lay the blame squarely at the feet of David Cameron’s conservative-led government. When elected in 2010, Cameron became a global standard-bearer for those who argued that what was needed in the aftermath of the financial crisis and Great Recession was belt-tightening rather than the fiscal stimulus of the kind once prescribed by John Maynard Keynes.
Cameron’s experiment with Britain’s economy has not worked. As we’ve said before, growth remains piddling. The IMF forecasts a whopping 0.7% in 2013. And job growth, which has been surprisingly resilient, is also now sagging. Nor is the austerity push delivering on government promises to bring the UK’s deficit and debt under control. The Cameron government has had to admit repeatedly that it will miss its own deadlines for cutting the deficit. As a result, Britain’s debt-to-GDP ratio continues to push higher. It was 79% when Cameron & Co. took over in 2010. It’s expected to be 93% by the end of 2013, according to Moody’s. That’s resulted in a loss of Britain’s triple-A rating. And as the above chart shows, the weak state of the UK economy is really proving to be a problem for the well-being of the average Brit, who is seeing standards of living decline relative to age-old rivals on the continent. Seeing UK incomes fall behind those of Socialist-led France has got to smart.
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