Posted Tuesday, July 26, 2011, at 3:47 PM
We're not the only English-speaking country with a representative government that's high on austerity policy right now. The U.K.'s just gotten its 2nd quarter growth reports after nearly a year of a Conservative/Liberal coalition, cuts, and tax hikes. How's it going?
A slowdown in Britain's growth in the second quarter means that the economy is weaker than thought and has no chance of meeting its official growth target this year.
The eagerly awaited preliminary GDP estimate for April to June showed the economy growing by 0.2%, rather than contracting. Although this was better than some of the gloomier forecasts, it is still slower than the 0.5% growth seen in the first quarter, which came after a 0.5% decline in the fourth quarter of last year.
Well, at least this is mostly the fault of tax cuts, which we're not trying here.
The fact that the contraction has come before the economy has begun to feel the impact of the VAT rise or the start of the spending cuts, due to bite from April, has also worried ministers.
Well, at least their realistic long-term cuts are assuaging the markets. Right?
The weak growth is fuelling fears that Britain could lose its AAA credit rating unless the economy picks up sharply in the third quarter.
Britain has a litttle more mobility and freedom to enforce austerity than the United States does. The Tories, barring a flight of the Liberals from the coalition, can stay in power until 2015, by which time a Britain with less debt can, theoretically, be in a boom. American politicians have 16 months before they face voters again.