Fitch hitches to the anti-austerity bandwagon

Credit ratings agency argues against affects of austerity.

Fitch Ratings are jumping on the anti-austerity bandwagon, it seems. Their new research is unambiguous about the extent to which stimulus helped the US:

Oxford Economics’ Global Economic Model (GEM) suggests that the U.S. policy response to the recession increased aggregate GDP by more than 4 per cent two and three years after the trough of the last crisis than otherwise would have been the case. These policies helped to support GDP growth of 3.0 per cent in 2010 and 1.7 per cent in 2011, implying that the U.S. might still be mired in a recession absent this stimulus.

If you like your bandwagon-jumping in visual form, they are happy to accommodate:

This is, of course, the same Fitch Ratings which wrote two months ago, as it put the UK on negative outlook, that one of the things which would trigger a downgrade would be:

Discretionary fiscal easing that resulted in government debt peaking later and higher than currently forecast.

So in March, discretionary fiscal easing is enough to downgrade a country; in May, it's found to have caused a 4 per cent boost to GDP. Those don't sound like consistent positions.

We asked Fitch whether this new research affected their recommendation for the UK, but they declined to comment.

Bargain hunters shop for discounted merchandise at Macy's on 'Black Friday' on November 25, 2011 in New York City. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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David Cameron softens stance: UK to accept "thousands" more Syrian refugees

Days after saying "taking more and more" refugees isn't the solution, the Prime Minister announces that Britain will accept "thousands" more Syrian refugees.

David Cameron has announced that the UK will house "thousands" more Syrian refugees, in response to Europe's worsening refugee crisis.

He said:

"We have already accepted around 5,000 Syrians and we have introduced a specific resettlement scheme, alongside those we already have, to help those Syrian refugees particularly at risk.

"As I said earlier this week, we will accept thousands more under these existing schemes and we keep them under review.

"And given the scale of the crisis and the suffering of the people, today I can announce that we will do more - providing resettlement for thousands more Syrian refugees."

Days after reiterating the government's stance that "taking more and more" refugees won't help the situation, the Prime Minister appears to have softened his stance.

His latest assertion that Britain will act with "our head and our heart" by allowing more refugees into the country comes after photos of a drowned Syrian toddler intensified calls for the UK to show more compassion towards the record number of people desperately trying to reach Europe. In reaction to the photos, he commented that, "as a father I felt deeply moved".

But as the BBC's James Landale points out, this move doesn't represent a fundamental change in Cameron's position. While public and political pressure has forced the PM's hand to fulfil a moral obligation, he still doesn't believe opening the borders into Europe, or establishing quotas, would help. He also hasn't set a specific target for the number of refugees Britain will receive.

 

Anoosh Chakelian is deputy web editor at the New Statesman.

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