Chancellor, Phillip Hammond, announced his spring budget on Wednesday. It is now 10 years since the Global Recession but the forecast remains a gloomy one for ordinary people.
The Office for Budget Responsibility (OBR) has revised up its forecast for economic growth in 2018 to 1.5% from 1.4%, but this will still be the lowest growth for six years. It was 1.5% in 2012.
We are told there is to be a marginal gain of 0.3 % in real wages in 2018 but this is after real wages shrank in seven of the previous nine years since the global financial crisis. Real wages in 2018 will still be down by 4.5% – or £20 a week on average – on the pre-crisis level ten years ago.
Public service will continue to suffer cuts through to 2022-23. Plus spending on infrastructure is still falling short of what is needed. The average planned between 2017 to 2022 will still only be 2.8% of GDP which still leaves us 20th out of 27 OECD countries.
And, the reduction in public debt, which the whole austerity exercise was supposed to achieve hasn’t happened either. What the OBR figures show is that cuts since 2010 have damaged economic growth and have proven counterproductive to improvements in the public sector finances. The reverse course of action is urgently needed.