British Prime Minister David Cameron will use a speech Thursday to reiterate his commitment to the austerity policies that have hampered the nation’s economic recovery since the Great Recession. Great Britain is on the brink of an unprecedented triple-dip recession, but Cameron and United Kingdom finance chief George Osborne have pledged to continue deficit reduction efforts.
Turning away from austerity now, Cameron will say, would send Britain “back into the abyss,” Reuters reports:
However, Cameron will tell his audience he has cut the country’s deficit by a quarter, interest rates are at a record low, exports are reviving, the number of people on welfare has fallen, and there are more people in work “than ever before in our history”.
“Of course, these signs of progress are just the beginning of a long hard road to a better Britain,” he will say.
Britain’s deficit has fallen, but it has done so far more slowly than Osborne and Cameron projected when they began austerity three years ago. In 2010, the British government projected that austerity would reduce the deficit from 4.8 percent of the economy to just 1.9 percent by now. Anemic economic growth and a second recession brought on by those policies, however, have left the deficit at 4.3 percent. The country is now one quarter of contraction away from its third recession in four years.
Austerity has plagued the European Union, of which Britain is a member, since the recession, forcing unemployment to record highs. Britain, however, is not a member of the European currency union and maintains its own central bank, making the conservative government’s continued adherence to deficit reduction all the more confounding. The same could be said of the United States, which is now focused almost solely on deficit reduction even as unemployment remains high, the recovery remains tepid, and evidence exists that the stimulative policies it originally pursued put it on a faster pace of recovery than Europe has experienced.