The economy is on course for another “decade in the doldrums” unless politicians increase public investment by £15bn annually, a think tank has warned.
The National Institute of Economic and Social Research has called for the investment, which would effectively double the UK’s public spending on infrastructure, to start at the Autumn Statement.
Without this, it said, growth is poised to limp along over the coming years and to remain far below its pre-2008 financial crisis trend, extending a 15-year squeeze on household living standards.
It argued that the chancellor, Jeremy Hunt, should raise and keep public investment at 3% of GDP in his Autumn Statement on 22 November, at an average annual additional cost of £15bn.
The think tank estimated that the chancellor has £90bn of headroom against his fiscal rules, far above other experts’ calculations. It has cautioned Hunt against tax cuts.
