The UK economy is in recession . The euro zone remains in crisis. The European Union is the UK’s biggest trading partner. To what extent are euro zone troubles dragging the UK down with them?
Clearly there is an element of UK performance that is being impacted by EU aggro. But Germany is in the EU too, and its export and employment statistics for the last two years have been impressive (to say nothing of its gross domestic productfigures).
We don’t have to ditch Plan A, but we do need to add to it, otherwise we risk another year of zero growth or worse. The UK economy is going nowhere and as long as euro zone break-up remains in the air we have to look at additional steps that we can and should be taking to kick-start the economy.
The knee-jerk reaction beloved of commentators is quantitative easing . The Bank of England didn’t add to QE last week, but then again with Greek election results uncertainty and Spanish bank bailouts it probably wanted to keep its power dry (if holding over 30 percent of UK sovereign debtcan be called keeping one’s powder dry).
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