In Keynes' Britain now we have a Conservative Government. The Chancellor of Exchequer, Mr Osborne, came to power in the aftermath of the 2008 crisis. He announced in April 2011 that Britain had a plan that "Taken together the measures I will announce today are fiscally neutral across the period. This is a Budget built on sound money. A Budget that encourages enterprise. That supports exports, manufacturing and investment." A sort of neo-growth approach I wonder. His forecasts for the years to come at that point indicated that private spending would be substitute for government spending. More, business investment and external markets would lead the way to robust growth. Although UK had a public debt similar in size to that of Greece, the Chancellor heralded that UK paid as low interest rates as Germany. Therefore, investment would be boosted with pro-business policies. Trade surplus was a matter of exchange rates and lower wages. Private consumption would not be the growth leader as before, specially financed by debt. In Mr Osborne's growth model I suppose foreign markets and private investments are virtues to be stimulated and public deficits and consumption spending are vices to be avoided. The following table and chart below show what would be Chancellor's dreams, his neo-growth model arriving in less than three years. That is, forecast by Treasury pointed that in 2013 above half of UK growth would be brought by investment and trade surplus, whereas the government contribution to growth would fade away.
Ideology with bad analytical tools have done so much damage for the UK and other EU economies that one gets forgiven if s/he thinks that the economy is governed by nothing else than plain vested interests.
Sources of Data used: