Posted on Tuesday 18th March 2014
Academics from the University of Birmingham, including Birmingham Business School's Professor John Bryson, recently discussed the impact of this week’s budget on the British economy.
Professor Bryson, Professor of Entrepreneurship and Competitiveness, says:
The March 2014 budget is a critical element of the Coalition Government’s election strategy. The context for the 2014 Budget is one of sustained and increased economic growth. Stronger growth improves public finances and reduces the deficit. Continued strong growth may remove the structural deficit.
Since the Autumn Statement we have seen revisions in growth forecasts for the years 2013-2014. Unemployment continues to decline and inflation has fallen below the 2% target. The UK, European and international economies are still recovering from the 2008 crisis. There are a number of dangers ahead including the threat of deflation, which is perhaps one of the ogres that could undermine the recovery of the economies of the EU and even perhaps the UK. The UK must avoid deflation at all costs.
The March budget needs to continue to enhance the wider framework conditions that support the competitiveness of British business… There are three barriers to the competitiveness of British industry. First, the escalating cost of energy and energy volatility. The cost of energy for business is a key constraint on the return of manufacturing jobs to the UK.
Secondly, initiatives to improve the country’s skill base would be welcome as one way of supporting longer term sustainable economic growth. Skill shortages in key sectors are a key constraint on economic growth and are perhaps even more important than problems concerning access to loan finance from the mainstream banks.
Third, the Government must continue to reduce red tape and bureaucratic complexity and a clear focus must be placed on supporting long-term sustainable economic growth."
To leave a comment on the above opinion, as well as read Professor Karen Rowlingson's, Professor of Social Policy and Director of the Centre on Household Assests and Savings Management (CHASM), views on the budget's impact on ordinary people, please visit the University of Birmingham Budget 2014 Perspective.