As it is our largest export market, trends in the US economy are important for the UK. My right hon. Friend the Chancellor will set out a full account of the UK economy in the pre-Budget report, but I can tell the House that gross domestic product rose by 2.75 per cent. in the year to the third quarter of 2006.
Is the Minister aware that The New York Times describes the US economy as a “financial mess” and that interest payments are the fastest growing component, squeezing out public spending and inducing recession? Bush’s conservative economic policy has been to spend unwisely and borrow heavily; his Administration have not had the sound financial management policies of our Chancellor. Will my right hon. Friend assure me that we have built-in protections in the UK economy against the growing US financial crisis?
I noticed that the Federal Reserve said yesterday that the economy seems
“likely to expand at a moderate pace”.
Whether it or my hon. Friend is right about the future remains to be seen. The key is maintaining our macro-economic stability in the UK—our record as a paradigm of stability, as the Organisation for Economic Co-operation and Development expressed it. For example, during the slow-down at the start of this decade, we were alone in the G7 in avoiding recession. Under the Conservatives’ policies, we were always first into recessions and last out. That is why the vast tax cuts that they are arguing for are such a threat to our continued economic well-being.