A path back to growth

Article

For the next few years, the priority in the UK is achieving output growth and the declines in unemployment that would accompany it. But understanding the UK's economic problems as a combination of short-term and longer-term risks makes it clear that a wider set of policies is needed.

After drawing out the two horns of the UK's economic dilemma - weak demand in the short term and the risk of reduced supply capacity and growth potential in the longer term - this paper outlines a range of interrelated policy changes, fiscal and industrial, to address these problems in the round.

It says that the roadmap for growth should have six crucial elements:

  1. an increase in the scale of quantitative easing
  2. fiscal measures to boost growth in the short term combined with a reaffirmation of the plan to eliminate the deficit in the medium term
  3. additional infrastructure spending
  4. measures to make household debt restructuring easier
  5. measures to keep the long-term unemployed in touch with the labour market
  6. an active industrial policy.

Related items

  1. Man Writing Code on Desktop Computer With Multiple Monitors Set Up and a Laptop in Creative Office

    Bottleneck Britain: How digital competition could power UK growth and sovereignty

    Artificial intelligence could be the UK’s biggest economic opportunity in a generation, but only if its gains are spread across the economy rather than pooled within a handful of companies.
  2. A photograph of the UK houses of parliament in Westminster, with a background of pound coins

    Taxing times: Policies, politics, and principles

    This paper sets out proposals for the path to a better tax system, which is able to meet the demands of both the public and a more dangerous world.

  3. Towards a Communities Agenda 2.0

    Andy Burnham’s arrival in Downing Street creates an opportunity to go much further on the communities agenda than we’ve seen up to now. So what should more ambition look like in practice?