Gordon Brown's Economic Record

Becoming chancellor of the exchequer in 1997, Gordon Brown presided over a long period of economic expansion. It seemed the UK laid the 'boom and bust' ghosts of previous decades to rest. The government failed to do anything to create inflation and a boom and bust.
One of the key factors in this was making the Bank of England independent in 1997; they have proved astute at using monetary policy to keep growth stable.

1. Unemployment. Under Gordon Brown, unemployment has continued to fall. The OECD have remarked on how the UK's competitive labour markets have helped to keep a lower inflation rate than other EU countries.
2. Inflation. Inflation has remained mostly on course and close to the government's target of 2%.
3. Gordon Brown is perhaps rightly proud of his economic record. He frequently tells us that the economy has done very well. But, although some statistics support this, why are not more people congratulating him?

Problems in the UK Economy

• Boom and Bust in the Housing Market. House prices have boomed in the UK, leading to a fall in prices which now threatens a recession
• High levels of debt. UK's growth has, to a large extent, been financed by high levels of consumer borrowing. Now that the credit crunch is tightening people's belts, there is little scope for extra spending. People's confidence is falling and people are looking to save.
• High levels of government borrowing. Brown increased spending leading to a rise in government borrowing, therefore there is limited potential for expansionary fiscal policy.

Overall - not bad, but could have done better, if he had reduced the housing boom and encouraged greater levels of spending rather than debt. Government finances unnecessarily deteriorated as well.