Glacial Growth

Kwasi Kwarteng yesterday said in his speech yesterday that the UK has historically 'glacial' GDP growth.

If you peruse the UK GDP chart above, you can see that, from the 1980s onwards, GDP growth was quite impressive. In 2008/9 there was a severe drop, caused by the Global Financial Crisis, but it then continued to grow until around 2016, after which it went rather flat. I wonder what happened in 2016?

The S&P Global manufacturing Purchasing Managers' Index (PMI) has remained below the 50-level that separates growth from contraction for 3 months in a row, driven by lack of foreign demand. 

Kwarteng wants to help people with their fuel bills AND grow the economy, but he was rather vague as to how long this growth would take to appear and how foreign investors would be attracted to the UK when their market for products would, in all effect, be limited to just the UK. 

Here's my rather radical idea.

1. A windfall tax on energy producers, resulting in the UK having to borrow less and thereby lessening pressure on interest rates. High interest rates, after all, are a disincentive to investment in growth.
2. Join a trading bloc, ideally one on our doorstep and one that has zero tariffs. This, I guarantee, would fuel market confidence and increase our GDP by something like 4%, which sounds suspiciously like the figure that experts believe we lost from our GDP by a certain action that was taken in 2016 and led to a decline in foreign demand. It would also solve the Northern Ireland issue at a stroke and possibly attract foreign investors who want to trade with that trade bloc. 

Simple! I wonder why no-one has voiced it before....

Kwarteng refused to admit he was politically wrong about the 45p tax rate, which might have gone some way to regaining a modicum of trust in him; instead he called it a distraction. Whoosh - any trust went straight out of the window.