Tuesday 12 December 2017

Brendan Keenan: Spending will resume if trust is restored and bank credit flows

CONFIDENCE, consumption and credit. The three Cs are the new holy grail of economic recovery, but finding them is a challenge that might intimidate Sir Lancelot himself.

At least it makes a change from all that talk about debt. Economic growth, which the three Cs would engender, is as much an ingredient of a return to normality as reducing deficits, or even defaulting on existing debt. More so, actually.

Just by way of a little illustration: last week's growth data from the CSO showed output (GDP) expanding by 5pc in cash terms in the first quarter of the year. So the debt ratio (which, conveniently for the sums, stands at around 100pc of GDP) fell by 5pc.

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