The pressure is on David Cameron to answer the gloom of Mervyn King – Telegraph Blogs

Saturday 15 March 2014 | Blog Feed | All feeds

Benedict Brogan



Merv the Swerv makes things difficult for Dave

As I tried to explain in my email this morning (sign up here) the Prime Minister is planning to use a major speech on the economy tomorrow to address the austerity v growth debate being pushed by Ed Miliband and his nouveau meilleur ami Francois Hollande. The choice between austerity and growth is a myth, he will say: if you don't sort the deficit there won't be any growth. Hence what the Government calls its tight fiscal-loose monetary policy. In other words, you need to cut spending and pump money into the economy. He will claim that business is supportive of the myriad micro-measures being pushed through by the Treasury. He will also address what he says is the clear and present danger posed by the euro crisis, arguing it is his job to protect us against the blowback of a Grexit. 'Makeup or break up' he will say. The immediate reason for the speech is plain: Mr Cameron can see the debate across the Channel shifting away from austerity, and he wants to head it off before it becomes unstoppable.

But after Sir Mervyn King's latest pronouncements on the dire state of the economy, Mr Cameron will need to do more in his speech if he wants it to have an impact. He will have to address the dire prospects for growth, the possibility that the recession will continue, the bank's forecast that we will not get back to where we were in 2007 before 2014 – seven years of loss. Contemplating the ashes here and the fire raging across the eurozone, it's tempting to ask if there is anything worth saying at all. In fact there is: Mr Cameron needs to find the rhetoric that maps a way through the difficult years still ahead, that acknowledges that we have not turned the corner, that there are no green shoots worth singing about. It is an opportunity for him to show leadership capable of steering us through that storm Sir Mervyn goes on about, to remind his party of the task at hand. No pressure then Dave, but it's looking dire out there. What have you got to say about it?

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