23.05.12
Government could shift emphasis to growth
The Coalition could shift its main focus from deficit reduction to investment and growth, as Deputy Prime Minister Nick Clegg signals a new direction for the economy.
In an interview with the Financial Times, Clegg suggested that the Government would increase investment in housing and infrastructure and shift the emphasis to growth. The election of François Hollande as president ofFrancechanged the terms ofEurope’s economic debate, he recognised.
This comes as the International Monetary Fund recommends an immediate cut in interest rates from the 0.5% level and an additional burst of quantitative easing to stimulate the economy.
Clegg said the Coalition’s deficit reduction plans had set out “in very lurid terms the state of the emergency we were facing”. But he added: “That kind of language over a prolonged period of time can have a dampening effect on mood, which is very important in an economy.”
He emphasised that this plan had earnedBritainmarket credibility, which could now underpin new investment.
“From the top of government, a few weeks ago we decided this was the route we’re going to take. That’s the instruction we’ve issued to the Treasury,” Clegg said.
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