Wednesday, July 27, 2011
0.2% growth is cause for celebration!
The lesser of two evils
Things must be bad when economic growth of 0.2% is better than expected. And indeed, things are bad. But it is a mistake to think they could be much better.
To understand this grim sentiment you have to take a step back and think what has happened in the British economy over the last few years. UK household debt which barely budged from 63% of GDP between 1993 and 1997 rocketed to 100% in 2007. Between 1997 and 2008 the number of credit cards rose from thirty-six million to seventy-one million. In the same period our spending on holidays more than doubled to £1,068 per annum and spending on other forms of entertainment rose by 76% to £250 per month. Consumer debt topped £1.4 trillion in 2008. Britain went on a borrowing binge.
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