A quick G20 response
Just a quick G20 response.
I was pleased and surprised by the outcome. The regulation and tax haven stuff is all good, although beside the immediate point.
But both the IMF expansion and the international trade credit facility are very welcome, and both bigger than I was expecting.
The trade facility in particular will be a great help to the global economy.
I think Brown has played a blinder on this.
I’d suggest two challenges for the Government now.
First, start selling this to the public in terms of how it helps Britain. I.e. explain how the trade facility will directly aid our manufacturers. At the moment it all seems a little remote from the ‘man in the street’.
Second, the budget. Whilst a larger stimulus seems to have been taken off the table (which I feel is a mistake), targeted action is still possible. The focus should be jobs – not merely training, but actual jobs. A house building programme would be my preferred option.
As a final word, let’s not get too excited by some of the better than expected (but still dreadful) data we’ve had on the world economy in the last two weeks. The rate of decline of various indicators seems to be stabilising, but the direction is still down. Let’s not start talking about ‘green shoots’ just yet.
With a bit of luck the G20 and some targeted fiscal action might get the UK economy growing again by Q4 this year, rather than my original estimate of Q1/Q2 next. But we need a bit of luck. And let’s not forget that economic growth which is not consumer spending led, will not feel as ‘good’ for most people. We’re not out of the woods yet, but well done Gordon.