No sign of sustainable economy in 2014

I agree with Kevin Hey’s assessment of the economy, but cannot accept Andrew Stephenson’s view that improvement to the economy is set to continue.

Any recovery is very weak and uneven and not built on solid foundations. Quantitative easing and personal debt have fuelled the economy.

Governor of the Bank of England Mark Carney delivers this year's half yearly Financial Stability Report at the Bank of England. Photo: Stefan Rousseau/PA Wire

Governor of the Bank of England Mark Carney delivers this year's half yearly Financial Stability Report at the Bank of England. Photo: Stefan Rousseau/PA Wire

The monetary stimulus (QE) of printing money in the form of bank bonds over the last four years has amounted to £375b. – eight times the original estimate set by the Government. These extraordinary and costly measures have failed to deliver sustained growth. This policy has created national and corporate debt for the future.

Meanwhile, personal debt has reached the astronomical figure of £1.46t. almost the same amount as Britain’s national economic output. The average household debt in the UK is £7,975. Debt consumerism will lead to a collapse.

Furthermore, investment in the economy has not been evenly distributed. The North continues to be the poor relation of the South, with a widening gap between the rich and poor. For instance, the Government’s £375b. National Infrastructure Plan to rebalance the economy shows a distinct bias. Eleven of the 20 largest infrastructure projects benefit London and the South-East. Only five of the top 20 benefit the North of England. 84% of planned spending on transport is in London and the South-East, compared to 6% in the North of England.

In addition, most of the jobs that have been created in the private sector are low paid and/or part time, making it impossible for people to pay their way in society and live independently without the support of the state, which is being ruthlessly cut back.

The omens for a sustainable economy in 2014 are not promising.

David Penney

Colne