Key issues in the economic outlook include: forecasts and analysis of UK and global economic prospects; the future of the euro crisis and the impact of quantitative easing.
Issues cover the monetary, fiscal and supply-side policies for growth advocated by the IoD. Monetary policy focuses on the IoD's stance with regard to interest rate policy and quantitative easing. Fiscal policy focuses on the IoD's stance with regard to public spending, taxation and deficit reduction. Supply-side policy focuses on the reforms advocated by the IoD in order to boost the competitiveness of the UK economy.
What the section covers:
- One L of a recovery - The IoD has consistently argued that in the wake of the financial crisis the shape of the economic recovery would be more L than V shaped, primarily due to bank de-leveraging and the weakness of the money supply.
- Quantitative easing - Exceptional times demand exceptional measures. The IoD has supported the expansion of quantitative easing, including the most recent expansion to £375 billion.
- Deficit reduction - The IoD has supported the Coalition Government's deficit reduction plan, with the overwhelming majority of adjustment through lower spending not higher taxation. However, the IoD has also said that key infrastructure spending should be ring fenced.
- Euro crisis - The IoD has argued that some form of break-up of the euro is inevitable and it could happen sooner rather than later.The monetary, fiscal and structural policies necessary to solve the crisis are very unlikely to be implemented.
- Supply-side revolution - The IoD has advocated 10 key policy changes spanning taxation, public spending, regulation, infrastructure, planning, energy policy, competition, public services, re-building social capital and EU policy, which could transform long term growth prospects in the UK.
E: Graeme Leach