Brown boosted by OECD
Gordon Brown’s helmsmanship of the British economy was given the thumbs up last night by an important economic think-tank.
The Organisation for Economic Cooperation and Development ‘s 2004 Economic Survey of the UK said it expected the economy to grow by 2.75 per cent during 2004 and 3 per cent in 2005.
But the OECD warned troubles lay ahead if Gordon Brown’s record budget deficit ballooned.
The OECD said spending was approaching a “speed limit,” with interest rates and tax set to rise if “instability” was ignored injudiciously.
Brown was commended for his “impressive” management of the economy, which has successfully coupled high growth rates with low, stable inflation.
The OECD report says: “The UK has proved remarkably resilient. More recently, it has been gaining momentum well ahead of the euro area.
“The decision in 2003 to wait before holding a referendum on joining the euro is perhaps unsurprising.”
The UK economy had weathered the global slowdown despite weakness among major trading partners in the EU, the report stated.
On public services, the Paris-based body said “the jury” was still out on whether “the massive spending increases will fully pay off in terms of improved service.”
In light of the report, Oliver Letwin, the Tory economic affairs spokesman, said: “The message is clear – either slow down spending growth or increase taxes.”
