OECD expects 'subdued' UK recovery in 2011

The UK's economic recovery slowed in the second half of last year and will remain 'subdued' throughout 2011, the Organisation for Economic Co-operation and Development (OECD) predicts.

In its latest UK Economic Survey, the organisation highlights fiscal tightening measures and a fading rebound in world trade as reasons for the slowdown. "Fiscal consolidation will impact significantly on government consumption and investment, but is also reducing household income growth through tax increases. "Slow real income growth will continue to hamper household consumption even though deleveraging pressures have eased as house prices and overall wealth positions have stabilised and saving rates recovered." The report also criticises the UK's 'inefficient' VAT system, describ...