Monday, November 28, 2011
30 billion plus 40 billion = not that much
Posted by David Smith at 09:00 AM
Category: Thoughts and responses

A billion here, a billion there, and soon you are talking about real money. The potential 40 billion the Treasury is talking about for credit easing - over it looks like four years - can be added to some 30 billion in extra infrastructure spending, much of it from institutions and sovereign wealth funds, probably over 10 years. All will be revealed in tomorrow's Autumn Statement.

It sounds like a lot of money, but 70 billion spread out in this way - say 10 billion plus 3 billion a year over the next four years - is somewhat less than 1% of annual gross domestic product. The hope that both will give more bang for the buck than their numbers suggest. But this is the chancellor signalling broad intent rather than providing a significant direct boost to economic activity.