ITEM club in dire economic warning

The Ernst
& Young ITEM Club
has warned that the economy is ‘skating on thin ice’
because of excessive household debt.

It said while Gordon
would be leaving
on a high, the strong economic performance is built on shaky foundations.

The ITEM club said the current benign macroeconomic environment had made both
individuals and firms overly relaxed about risk, inflating asset values and
transactions and boosting borrowing and spending.

‘Many people are following the chancellor’s lead and are borrowing to finance
consumption,’ said Peter Spencer, the ITEM Club’s chief economic adviser.

The ITEM Club predicted the economy will expand by 2.9%t this year, in line
with the chancellor’s 2.75% to 3.25% forecast.

Further reading:

ITEM Club warns of disappointment for chancellor

No surprise as rates left unchanged

Related reading