The fact that France and Germany have exited recession is proof that stimulus packages are working, an expert has said.
Professor Iain Begg from the European Institute of the London School of Economics argued the combination of fiscal stimulus, tax cuts and lower interest rates has helped end the downturns.
He suggested that greater consumer debt and a larger financial sector are the reasons for Britain being behind with its recovery, but remarked that the success of the French and German governments’ actions are a “positive indicator” that Britain will soon see growth again.
Such a situation may encourage those who are struggling with debts at present, while acknowledging that dealing with this may be causing the UK to have a slower recovery.
Figures from the Statistical Office of the European Communities Eurostat showed that the second quarter of 2009 brought an overall economic contraction of 0.3 per cent across the 27-nation bloc.