George Osborne’s budget this week will not gain him any friends politically, however it may in the long-term be remembered as the first indication from the Coalition government that this country is on its way back.
By cutting the top rate of tax of 50% to 45% – still a huge amount of money – the Chancellor has also signalled who he thinks will lead that recovery.
This nation had two things to sell to the world – one is running out in the North Sea and other has got absolute battering because the economy is more exposed than most to the banking sector, of which the City of London is the driving force.
So, at a time when Nicolas Sarkozy is talking of introducing a 75% tax rate, the best way to attract the brightest from the world of banking, accountancy and finance over here is offer the most attractive rates.
Having said all this, they are also lucky to be here, something that they need to be made aware of as this nation begins its still painful process of recovering from the financial crisis of 2007.
Brazil has become the sixth-biggest economy in the world, the BBC’s website reports. It says the country’s finance minister Guido Mantega said the Brazilian economy is now worth $2.5tn (£1.6tn).
The Latin American nation’s economy grew 2.7% last year, official figures show, more than the UK’s 0.8% growth.
The National Institute of Economic and Social Research (NIESR) and other economic forecasters also said that Brazil had now overtaken the UK.
Mantega said: “It is not important to be the world’s sixth-biggest economy, but to be among the most dynamic economies, and with sustainable growth.”
Brazil is enjoying an economic boom because of high food and oil prices, which has led to rapid growth.
However, according to NIESR, using the IMF’s figures at current exchange rates, Brazil’s economy is now $2.52tn and the UK’s is $2.48tn.
The larger increase in the nominal size of both economies is explained by domestic inflation.
The Centre for Economics and Business Research has also said that Brazil’s economy has overtaken the UK’s.
In the fourth quarter of last year, Brazil’s economy grew by 0.3% from the previous quarter, according to Instituto Brasileiro de Geografia de Estatistica.
Brazil, the largest Latin American economy and one of the so-called Bric nations together with Russia, India and China, has seen its economy soar in recent years, with growth far outpacing the US and western Europe, but sending inflation higher.
The currency, the real, fell 11% against the US dollar last year.
That is after two years of huge gains – up 5% in 2010 and 34% in 2009. The currency is worth more than double what it was 10 years ago.
With substantial oil and gas reserves continuing to be discovered off Brazil’s coast in recent years, the country is now the world’s ninth largest oil producer, and the government wishes to ultimately enter the top five.
The country will also host the 2014 World Cup, and Rio de Janeiro will be home to the 2016 summer Olympics.
This country will face five more years of cut backs – otherwise known as austerity. It will mean that when the coalition government runs for re-election in 2015, they will do so with the promise that there will two more years of “tough choices” before the deficit will be eliminated.
During this time, the axe will fall on 700, 000 public sector jobs, so taking the number of jobless past the three million mark – already over one million of our young people have little prospect of finding a job in the current challenging climate.
Last night, Danny Alexander, chief secretary to the Treasury, informed Newsnight that the Lib Dems were right behind the plan for more cuts.
The opposition says the cuts are too fast.
They are right – the social consequences of the planned austerity measures are horrendous, which is something that the young, well heeled George Osbourne does not seemed to factored into his equations.
However, the two Eds need to come up with ideas as to how propel the economy foward – now is not the time for political point scoring or in fighting, hopefully Labour has learned its lesson from the last time there was a prolonged period of Conservative government, then first Tony Benn and then an overconfident Neil Kinnock ensured three terms of Thatcher, which was followed by John Major.
Arguably the cost to our children will be much worse if David Cameron and George Osbourne are allowed to continue.
According to the Joseph Rowntree Foundation, opportunities for those born into modest incomes have been on the slide since 1970.
One can imagine what they will like on May 7, 2015.
With Italy the latest nation to suffer under the burden of being linked to a single currency, very real questions are being asked about the future of the Euro.
TheEconomist says that Europe has not addressed the fundamental changes around her – namely the rise of a younger slimmer Asia at the cost of this grand once great old man.
Today’s Financial Times outlines a three-trierEurope with France-Germany as the engine, the driver of a system that relegates eastern Europe to the periphery.
Of course, Gordon Brown did warn everyone that France – like Germany – was exposed because of her banks.
So what will become a unit that once touted as a serious economic challenger to the United States of America?
And will things ever be the same again?
The international system created by Europe was never perfect, and frankly the world outside this club of nations was roped into joining it.
Some powers suffered like China, some simply vanished – like the Ottoman Empire, whose loss the Islamic World has been suffering the consequences of to this day, especially in a world order based on power.
The history of the end of the ‘Sick Man of Europe’ can be traced back to the creation of the tiny kingdom of Greece, a cause championed by Shelley and Byron.
The behaviour of the main players at that time towards this once great and now grand old man was racist.
(Ever wonder where Adolf Hitler some of his ideas from?)
Now a century or so on, with the Eurozone crisis sparked by a bankrupt Greece, how will the main players on the international scene deal with their once great and now grand friend.
With America already signalling that she will be looking East, how will China view this potentially barren economic wasteland, which still fights wars against weaker nations, whilst lecturing others about human rights?
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