Recovery not easy
The Bank of England has warned that the economy cannot afford a further attempt to stimulate the economy by higher government spending.
The concern is that the overall level of the national debt will rise to levels which compromise the confidence of investors at home and overseas and jeopardise the recovery.
The warning comes when an attempt to sell new government stock (gilts) failed – only the fourth time ever that a sale programme has failed to find sufficient buying interest. This illustrates the very fine line the government has to walk between trying to engineer a recovery without straining the economy so that the upturn itself is compromised. Charities need to recognise that although claims of some ‘green shoots’ of improvement will inevitably be spotted over the next few months the upturn when it comes will be slow to build with 2010 a year of only modest expansion.
Author: John Kelly
John Kelly is head of client investment at CCLA.
There are no comments on this article. Be the first to comment.