The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Giles Gibson Headshot

How Is Britain's Economy Actually Faring?

Posted: Updated:
Print Article

Walking through the bustling Central business district on my way to my first day at work here in Hong Kong, it was hard to believe that days before I had been watching Britain's politicians bicker over the state of the economy at their respective party conferences.

The towering skyscrapers, crowds of rushing commuters and warm Hong Kong air made the icy financial crisis facing the Eurozone seem like a distant memory.

The thick pollution in that same Hong Kong air may have been affecting my judgement slightly, for Hong Kong's economy is not in as rude health as my morning commute would suggest. However, at least everybody here can agree on that.

Figures announced by the IMF in recent weeks seem to give a pretty good indication of where Britain's economy is heading. The IMF's growth forecast for Britain this year was slashed to -0.4%, and in 2013 we can expect growth of 1.1% at best.

However, ignoring these figures and instead listening to the versions being touted by both sides of Britain's political divide the other week, the picture becomes far less clear.

In his speech to the Conservative Party Conference in Birmingham, David Cameron's message was straightforward: "Britain is on the right track". In other words: Britain has weathered the economic storm, faced the worst of it, and we can now look forward to growth. The IMF's figures would seem to support this.

In contrast, at the Labour Party Conference in Manchester, Ed Miliband and Shadow Chancellor Ed Balls were outlining a very different portrait of Britain's economy. Balls commented that "George Osbourne's plan is hurting...[and] it's just not working".

So, the difference in these two portraits of Britain's economy boils down to a single word that has separated the two parties on economic policy since this coalition took power: cuts.

The Conservatives want you to believe that their cuts are the reason why Britain can expect small, but in the context of these uncertain times, reasonable economic growth. Labour want you to believe that the brutal extent of those cuts is exactly why we can expect only 1.1% growth next year.

So who should you believe? That is not for me to say. The issue does however reveal a growing trend in the way the general public interact with economic policy in this volatile world economy.

Just as Europe's central bankers are finding themselves increasingly thrust into the limelight, economic terminology is moving into much wider use. QE, OMTs and the FTSE 100 are not meaningless jargon but part of an everyday, wider political debate.

This shift is certainly no bad thing. Just as we are seeing in the latter stages of the U.S election, economic policy will define our own next election. It will play a huge part in deciding which party will be defending their economic track record in government and which will be shouting from the shadows at their respective party conferences in three years time.

As Ed Miliband unveiled his 'One Nation' concept on the long road to the next General Election, the question Britain's voters have to ask themselves about their economy is simple: could it have been a lot worse, or should it be a lot better?