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Will the next UK government be up to the job?

With unemployment and inflation on the rise and GDP falling will the next Government be up to the job?

With the number of different problems affecting the UK it looks like the next government will have a major job to do.

From rising unemployment to a drop in the country’s Gross Domestic Product (GDP) are any of the current party leaders up to the job?! This is a question I don’t want to even attempt to answer because it’s likely to be endless. All three of the leading UK politicial parties have set ideas on how they would solve Britain’s ongoing economic crisis and unemployment levels. However, this doesn’t mean the ideas are necessarily sound or even feasible in the long-term.

Let’s take a look at some of the key issues that our next illustrious leader will be facing after May 6th:

Gross Domestic Product (GDP)

Following the first quarter of 2010, the Office for National Statistics (ONS) has released preliminary figures that suggests the UK GDP rose by a fractional 0.2%. Once this has been confirmed, it could represent a minor drop in activity since the final quarter of last year, when the GDP increased by 0.4%.

David Kern, Chief Economist at the British Chambers of Commerce (BCC), commented that the figures were weaker than many had expected, however, he added that they were not entirely

“Lower growth in the first quarter of this year compared with the last quarter of 2009 was anticipated by the BCC’s Quarterly Economic Survey, and is consistent with our forecast published in March.”

Mr Kern went on to say:

“Although still weak, GDP has now recovered for two quarters in a row, so it is important for policy-makers to focus on ensuring that the recovery continues and a double-dip recession
is avoided.”

Following the General Election on May 6th, the BCC will be calling on the new government to put a credible deficit-reducing plan in place, to allow small businesses to help lead a sustainable recovery in the UK.

They have also warned that without an effective, credible plan to reduce the country’s deficit then there is a very serious risk that the fragile economic growth will die, slipping the UK back into economic decline, causing a “double-dip” recession.


Unemployment has recently risen to 2.5 million and the BCC believe that this is likely to plateau at 2.65 million.

However, the BCC have been wrong before and with the drop in GDP and the risk of falling back into recession it remains a very serious risk.

One of the most worrying things that the Labour Party did in recent months was announce that they were cutting public spending on construction projects. Although this is understandable as money will need to be redistributed to helping to stimulate the economy further, this is likely to have a very bad effect on construction firms and their workers as many rely on public contracts.

Interestingly, Graeme Leach, Chief Economist at the Institute of Directors, had this to say on the matter:

“These latest figures reveal more worrying evidence that the government is still not taking appropriate steps to bring public spending under control. There remains a yawning gap between the performance of the public and private sectors. The latest figures show public sector employment up 46,000 (year on year) whilst private sector employment is down 527,000 (year on year). On a quarterly basis public employment is up 7,000 and private employment down 61,000. The performance divide can also be seen in pay. Earnings growth in the public sector is at 3.7%, double the 1.8% rate in the private sector.”

Apart from GDP and unemployment the next UK government also faces high inflation levels and rising costs of fuel and energy. The only word of advice I will offer up is to think about your vote when it comes to Election day…

Related posts:

UK unemployment hits 15 year high

Rate of UK recovery slower than anticipated

Retail sales figures raise fear for recovery


Photo by Danilo Rizzuti



4 thoughts on “Will the next UK government be up to the job?

  1. It’s really great article for a real busimess. Everyone of them need it in order to understanding their business…

    Posted by Smallbusiness Services | April 26, 2010, 3:24 am
  2. thanks! 🙂

    lets write them until the admit it, or stop doing it! i am writing them now!


    Posted by batttilmstake | May 15, 2010, 3:30 am


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