[Co-authored with Scott Lavery]
One of the professed goals of the coalition has been to ‘rebalance’ the UK economy away from debt-fuelled domestic consumption and into export-led growth, supported by increased investment in manufacturing.
There is growing evidence, however, that in spite of a recent increase in growth and employment, the government is not delivering what was promised. Rates of investment remain low, household debt is rising once again, and pay in manufacturing continues to slip behind financial services.
It didn’t have to be like this. Indeed, in many ways the post-2008 context has provided the ideal circumstances to re-orientate the British growth model towards tradable sectors such as manufacturing – primarily because sterling has deteriorated in value (at least partly by design). Research released by the Sheffield Political Economy Research Institute today, however, demonstrates a spectacular (and, in the postwar era, unprecedented) failure in this regard.
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Image: William Warby