How do we fix Britain’s stagnant economy?

With every passing week it becomes clearer that the British economy is in crisis. Not the ‘here today, gone tomorrow’ sort of crisis that bedevils the financial markets, but rather the deep-seated, slow-burning crisis of a progressive, life-threatening disease. ‘I am totally 100 per cent on it, and it is going to be okay and we are going to get through this,’ the Prime Minister promised last week. If so, he’s got his work cut out.

The economic performance of the UK economy has deteriorated sharply over the last decade-and-a-half compared to its performance beforehand. On key measures, such as output per hour worked, the UK was a poor performer even before the recent deterioration. 

Unfortunately, there are few serious grounds for optimism. Unless there are fundamental reforms of the economy, the most likely scenario is that the UK staggers on with very low growth. As a result, living standards will barely improve and the country will inevitably slide down the international economic league tables.