Britain’s economy is trapped in a ‘growth crisis’ rather than suffering from spiralling debt troubles - and it’s only going to get worse, according to an economic expert from The University of Sheffield.
Governments across the globe are managing shortfalls and clawing at cutbacks to decrease debt but in doing so are killing off growth and exacerbating the fragile economic climate, says Professor Colin Hay.
The co-director of Sheffield Political Economic Research Institute will tell leading international researchers, policy-makers, journalists and opinion formers he believes we are in a crisis of growth, not of debt.
Speaking at the inaugural SPERI conference at the university from today until Wednesday, Prof Hay will say the economic crisis will only be exacerbated, as we have already witnessed throughout Europe, by deficit reduction and public cutbacks.
He said: “If the solution to a crisis of debt is austerity, then the solution to a crisis of growth arising from the exhaustion of the old, inherently unstable, growth model is to find another.”
Professor Hay and experts will seek to identify the problems ‘suffocating’ the resuscitation of growth in the years ahead in Britain – focusing on monetary policy, the effective rationing of credit and commercial lending that has occurred since the crisis due to covert bank recapitalisation, and the inter-generationally unsustainable character of a growth model based on asset and house price appreciation.