Soros warns on double-dip in UK

Each day it sounds more and more likely. The fourth quarter economic contraction is being blamed on “bad weather” by the Tories, but that’s not unlike a school child blaming the dog for eating their homework. Soros made his fortune betting against the Tory economic policies of the ’90s so his warnings have to be making the current regime nervous. The Guardian:

Speaking in Davos, Switzerland, the hedge fund owner who famously wrecked the reputation for financial competence of the last Conservative administration on Black Wednesday said the mix of tax increases and spending cuts planned by the coalition was unsustainable.

Soros’s suggestion that the UK needed a plan B came only hours after Cameron insisted in fierce Commons exchanges with the Labour leader, Ed Miliband, that there would be no change of government policy following the unexpected news yesterday that the economy contracted by 0.5% in the final three months of 2010.

“I think they may be right in embarking on it [the austerity programme] but I think they will probably have the sense that they will have to modify it when the effects are felt,” Soros said. “I don’t think it can possibly be implemented without pushing the economy into a recession.” Noting that the initial market reaction to the government’s tough stance had been positive, Soros added: “We will have to see it unfold. My expectation is that it will prove to be unsustainable.”

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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