The future of the UK economy may not be as bright as some have predicted, with the weakest recovery in "industrial history" limiting annual growth to 1% in the longer term, according to a thinktank.
Higher government spending and an ageing population are among the factors that will render the sustainable growth rate far lower than the 2.5% the Treasury thought typical between the 1980s and 2000s, according to the Institute of Economic Affairs (IEA). Its assertions, published in a discussion paper entitled ‘Will flat-lining become normal?', play down recent upbeat news on the economy, culminating in the OECD lifting its 2013 growth forecast for the UK to 1.5% and Chancellor George Osborne declaring this week it had "turned a corner". But economists writing in the IEA paper said th...
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