Have we turned a corner? Thinktank tempers upbeat UK growth outlook

The future of the UK economy may not be as bright as some have predicted, with the weakest recovery in 'industrial history' limiting annual growth to 1% in the longer term, according to a thinktank.

Higher government spending and an ageing population are among the factors that will render the sustainable growth rate far lower than the 2.5% the Treasury thought typical between the 1980s and 2000s, according to the Institute of Economic Affairs (IEA). Its assertions, published in a discussion paper entitled ‘Will flat-lining become normal?', play down recent upbeat news on the economy, culminating in the OECD lifting its 2013 growth forecast for the UK to 1.5% and Chancellor George Osborne declaring this week the UK has "turned a corner". Economists writing in the IEA paper said th...