Here’s Vince Cable, my favorite member of the Cameron government:
LONDON (Reuters) – British business minister Vince Cable said Britain could fall back into recession for a third time since the 2008 financial crisis but expected the economy to stagger on with minimal growth.
In an interview published on Sunday, Cable, one of the most senior ministers in the coalition’s junior Liberal Democrats, said Britain could also face a Japanese-style stagnant “lost decade”.
“There is a real worry about (that), a real risk of that,” he said. Asked if the economy was heading for a ‘triple-dip recession’, after falling twice into negative growth since the financial crisis, he said: “There is certainly a risk.”
. . .
Conservative finance Minister George Osborne announced new official forecasts on Wednesday that slashed expected growth to 1.2 percent in 2013 and 2 percent in 2014, with the economy seen shrinking this year by 0.1 percent.
Cable, a former economist who is responsible for Britain’s industrial policy, has long said Britain’s economy is starved of demand, but supports the coalition’s austerity program aimed at slashing its budget deficit.
The government hopes that loose monetary policy and record low interest rates will nurture a private sector recovery, but Cable said he hoped the Bank of England’s new governor Mark Carney would come up with fresh ways to assist the economy when he takes up the post next summer.
“We have got to have a very expansionary monetary policy, which we have had until quite recently, but I sense the Bank of England is running out of steam, or perhaps motivation. A lot depends on this new governor,” he said.
What’s really going on here? It would be easy to make fun of Mr. Cable, as he is basically hoping that Mark Carney will ignore the instructions from the Cameron government to hit a 2% inflation target, and go for faster nominal growth. How do I know this? Because previously he’s called for the BOE to switch to NGDP targeting.
Now read it again. Don’t you sense a depressed individual who has lost the argument within the administration (to the VSPs) and is afraid the growth may not materialize?