Liz Truss appeared to suggest that her mini-budget may have paid off long-term as her newly formed taskforce issued a dire warning that the UK risked falling behind other countries in living standards if stagnation is not tackled.
The shortest-serving prime minister of Britain compared the current slowdown in GDP to a “boiling a frog situation” when at a gathering to introduce the GDP Commission.
When asked by reporters if her own economic strategy had been the best one, she responded, “It’s a long game.”
On Wednesday, taskforce members expressed dire forecasts for the UK in the absence of taking use of artificial intelligence (AI) and other technology advancements.
According to US economist Tyler Cowen, if the economy is not strengthened, Polish living standards could surpass those of the United Kingdom in ten years.
“We actually live in a world where it is imaginable that in less than 10 years living standards in Poland have exceeded living standards in Britain,” he said.
“Don’t blow this opportunity, the stakes are remarkably high… I’m very optimistic but to get it right my core message would be we really do need to focus on economic growth.”
Ms. Truss was seated in the audience rather than on stage during the discussion, despite the fact that she convened the commission and does not have a formal role in it.
She was later overheard saying: “We’ve been through a boiling a frog situation… It hasn’t dramatically gone away but it’s got worse and worse.”
Shanker Singham and Douglas McWilliams, the commission’s co-chairmen, said during the occasion that slow development was a widespread issue in all G7 nations, not just the UK.
However, Mr. McWilliams observed that throughout the post-Covid era, Britain in particular did not appear to have regained its “mojo.”
He claimed improving competition would be key to boosting growth, saying: “We are almost fanatically pro-competition… We feel that’s the thing that will make the difference.”
To help people grasp the “cost” of government policies, Mr. Singham said that economic modelling should be more “dynamic”—that is, it should take into account the long-term effects of factors like tax policy.
By 2040, the panel believes “consistent” growth levels of 3% are feasible, but it hasn’t offered any ideas for how to get there.
It stated that the initial focus of its work is on bringing attention to the issue of low growth and that it intends to produce more analyses both before and after significant fiscal events to look at how struggling economies might be reformed.
The announcement follows Chancellor Jeremy Hunt’s recent statement that fighting inflation takes precedence over tax cuts, dealing a blow to Tory MPs who had been calling for a pre-election giveaway.
Ms. Truss’ main focus during her unsuccessful run for Tory leader and subsequent brief tenure in No. 10 was growth.
As she and her chancellor Kwasi Kwarteng attempted to utilise a mini-budget to stimulate growth in the British economy, the mini-budget caused turmoil in the financial markets and raised mortgage rates. Ms. Truss railed against the “anti-growth coalition” at the time.
