Lamont Sees No U.K. ‘Green Shoots’ This Time as Banks Suffer
Former U.K. finance minister Norman Lamont, who drew fire during the 1990s recession for announcing the “green shoots” of recovery, said he wouldn’t use the phrase again now because the banking system remains broken.
“There are some optimistic signs but I wouldn’t call them green shoots,” Lamont said today at the Banking Outlook 2009 Conference in London. “The rate of decline in the economy is decelerating. For a recovery, the first thing that has to happen is, you stop falling. Then you have to bump along the bottom. It’s very unlikely you’ll zoom up into a trampoline recovery.”
Bank of England Governor Mervyn King said last week that the British economy faces a “relatively slow and protracted recovery” and that U.K. lending may take longer to resume than he forecast in February. Lamont, who first coined the phrase “green shoots,” said that Britain has a long time to wait before economic expansion resumes.
“We face a long period of very, very slow growth and bumping along the bottom,” he said in an interview after his speech. “Green shoots doesn’t mean trees, it just means the first signs of recovery. Until the banking system is properly fixed, I don’t think we’ll have a real recovery.”
U.K. home sellers raised asking prices in May by the most in more than a year as buyers’ access to mortgages improved and the number of properties for sale dwindled, Rightmove Plc said in today. Prices still fell 6.2 percent from a year earlier.
Housing ‘Key’
Rising home values will be a “key” element of Britain’s return to growth, Lamont, who was Chancellor of the Exchequer from 1990 until 1993 under former Prime Minister John Major, said in the interview no fax pay day loan.
“Monthly increases in house prices on a sustained basis, that’s what I’d look for,” he said.
At the October 1991 Conservative Party conference, Lamont said: “It’s clear that Britain is coming out of recession. The green shoots of economic spring are appearing once again.”
That quarter, the economy ended a streak of contraction that had lasted more than a year. Gross domestic product rose 0.1 percent then and in the first quarter of 1992 before contracting 0.2 percent in the final drop of the 1990s slump. The economy grew continuously since then until last year.
The phrase “green shoots,” which drew criticism for Lamont at the time for being premature, has since become politically loaded.
Opposition Conservatives rounded on Business Minister Shriti Vadera when she said in an ITV Lunchtime News television interview on Jan. 14 that she was “seeing a few green shoots but it’s a little bit too early to say exactly how they’ll grow.” The economy shrank 1.9 percent in the first quarter, the most since 1979.
Lamont said his turn of phrase had lived longer than he expected. Referring to the American author who died in 1967, Lamont joked: “Dorothy Parker said her epitaph will be: ‘Excuse my dust.’ Mine will be: ‘Excuse my green shoots.’”
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