The Coalition has admitted that the scale of the UK’s economic crisis is larger than the government could have forecasted.
The recent news that the economy has plunged into a recession, after two consecutive quarters of contraction, has prompted an announcement by the Prime Minister and his Deputy that the economy has suffered ‘massive trauma’. As a result the true picture of the UK’s faltering economy is ‘greater than anyone thought’.
Recent statistics released from UK charity Credit Action have revealed that not even quantitative easing measures have served to help consumers weather the economic crisis. Outstanding personal debt in February was £1.457 trillion (up from £1.452 trillion last February). This is almost as much as the annual GDP during 2011.
Mr Clegg has highlighted the fact that because several factors contributed to the economy’s decline, the process of repairing the damage will be a complex one:
“We have to remember our economy has undergone a massive trauma, the depth and nature of which we are only beginning to fully grasp. 2008 was like a giant heart attack. The banking sector blew up.
“The housing bubble burst. People – and government – had astronomical debts they suddenly couldn’t afford. And you cannot recover from that overnight.”
David Cameron went on to make it clear that the government is doing everything in its power to stimulate economic growth:
“I don’t hide from the scale of that challenge – or from the message sent by voters in many places in last week’s elections. I’m listening. I’m leading. I get it. There are no closed minds, no closed doors in Downing Street.”
Although the Prime Minister will attempt to allay the public by emphasising that he fully understands the severity of the economic downturn, Shadow cabinet office minister Michael Dugher, has argued that more must be done.
“The problem is not the Government’s spin, it’s Cameron and Osborne’s recession,” the MP for Barnsley East said.
“Until we see a proper plan for jobs and growth, and real help for people whose incomes are being squeezed, no one will believe that David Cameron gets it.”
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