Britain’s economy risks emerging from the pandemic into a long period of stagnation that damages household incomes and undermines plans to level up the regions, according to a hard-hitting report by the National Institute of Economic and Social Research.
As it downgraded growth forecasts for next year and predicted a rise in prices that could push inflation above 5%, the thinktank accused the government and the Bank of England of mismanaging the economy since the 2008 financial crash.
Jagjit Chadha, NIESR director, said the government had come to rely on low interest rates to prop up the economy, allowing ministers to abdicate responsibility for directing investments to corners of the economy that needed it most.
He said it was likely the regions outside London would miss out on much of the recovery, widening the gap between rich and poor regions. Cuts to welfare benefits and rising levels of inflation would also hit the disposable incomes of poorer…