Britain must stick to tough love
Its justification — “materially weaker growth prospects” — has been seized by the government’s opponents to attack spending cuts. But the warning from Moody’s is in reality a Valentine to austerity. George Osborne, the chancellor, really does need to continue his policy of tough love.
Britain’s big problem is that its fiscal deficit, at over 8% of GDP, is double the average for the euro area. Only Greece and Ireland have a bigger gap. That government cuts have wounded growth in the short term is true. But how much deficit-spending do critics want? This year, if the cuts go according to plan, the government will still spend £120bn (€144.4bn) more than it takes in taxes. That would normally be considered pump-priming on a heroic scale.
