Newspaper article The Evening Standard (London, England)

Getting on Track for Broader Recovery Is Today's Big Task; BUDGET 2014 COMMENT

Newspaper article The Evening Standard (London, England)

Getting on Track for Broader Recovery Is Today's Big Task; BUDGET 2014 COMMENT

Article excerpt

Byline: Anthony Hilton

IF George Osborne has a nightmare, it is that the recovery for which he has waited so long will be seen to run out of steam before the election in 13 months' time. It is one thing to persuade the electorate that austerity has been worth it when the economy is surging forward; quite another to get its backing if it is once again languishing in the doldrums.

But there are many, Bank of England Governor Mark Carney included, who worry the buoyancy cannot last unless it becomes more broadly based. The glow from a recovering housing market has warmed other parts of the economy, but that can only take us so far. The next step has to be significantly more business investment and substantial growth in exports.

When you wade through the welter of forecasts and the deluge of statistics with which Chancellors try to cow the opposition, that is the reality you find. And it is a truth borne out by the Chancellor's own creation, the Office for Budgetary Responsibility, admittedly not the most accurate forecaster the economy has ever seen, but one whose views the Chancellor holds dear. The numbers it produced alongside the Budget highlight how the good times are unlikely to last if we simply continue on our current course.

Osborne's priorities today directly relate to this problem. He needs British companies to export more; he needs them to invest more and he needs the momentum that can be seen in London to spread to the rest of the country.

Exports are a particular embarrassment. Grant Thornton, the professional services firm, this month produced a detailed study of what life ais like in Britain's 34,000 mid-sized companies -- the segment which employs between 50 and 500 people and which, though it never gets the credit, is the real engine room of enterprise.

It found UK mid-sized companies were significantly less inclined to export than their Turkish, German or Indian rivals, with only one in five expecting to expand their international operations. …

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