The UK is experiencing a slower economic recovery than 23 of the 33 advanced economies monitored by the International Monetary Fund (IMF), according to new analysis published by the TUC on 9th May.
The research, which comes as the IMF begins its two week visit to Britain today, says UK income per head – economic growth that takes account of population change – will not return to its pre-crash level until 2017.
By contrast, income per head in Germany and the US will be over 10 per cent higher a decade on from the financial crisis, while South Asian economies are set to have growth of over 20 per cent.
The TUC says the figures, which are based on the IMF’s latest GDP forecasts, reveal that the UK risks enduring a ‘lost decade of growth’, while many of its economic rivals forge ahead.
With the Chancellor identifying an economic ‘global race’ as the defining challenge for the government, the TUC report shows how George Osborne’s own strategy is causing the UK to fall behind its competitors.
The study also reveals how the UK is emerging from recession at a slower rate than at any time in its recent history.
In 1985, UK income per head was six per cent higher than it was before the 1980 crash. In 1995, UK income per head was seven per cent higher than it was before the 1990 recession. UK income per head is today still six per cent below its 2008 level.
The Chancellor cannot blame Europe for the UK’s economic woes, as the vast majority of the Eurozone’s countries are performing better, says the TUC.
George Osborne faces further embarrassment this week when he hosts a meeting of the G7 finance ministers on Friday. Only Italy are experiencing a slower recovery than the UK among G7 countries.
Recent TUC analyses of the ‘global race’ – available at www.touchstoneblog.org.uk/tag/global-race – have found that the UK is lagging behind most of its G7 competitors on exports, wage growth and manufacturing too.
George Osborne must heed the IMF’s recent call for the UK to ease off austerity and follow the example of the US by investing in jobs and infrastructure, says the TUC.
The TUC wants to see a large jobs and infrastructure stimulus, including a jobs guarantee and an extensive house building programme to get growth and confidence back into the economy.
TUC General Secretary Frances O’Grady said: ‘We truly are experiencing a lost decade for growth.
‘While other countries are already seeing a rise in economic output, the UK won’t return to its pre-crash level for another four years.
‘The Chancellor’s commitment to self-defeating austerity has prolonged people’s suffering and put the brakes on our economic recovery – so much so that escaping a triple-recession is considered by some to be a cause for celebration.
‘Even George Osborne’s favourite economic institution, the IMF, is calling on him to change course. Without a fresh approach we will continue to trail our economic rivals and bring up the rear in the global economic race.
‘He should start learning from countries like the US whose ambitious programme of investment in jobs is helping to turn its economy around.’