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Ex-FSA chair Lord Turner: Recovering economy like ‘hair of the dog’

Former FSA chairman Lord Turner has compared the UK’s recovering economy with the “hair of the dog” treatment for a hangover.

The Guardian reports Turner said the cocktail of monetary stimulus launched over the past five years, such as low interest rates, quantitative easing and Government schemes to boost lending, are equivalent to a “stiff drink” used to treat the economy’s “hangover”.

Speaking at the World Economic Forum in Davos, Turner said: “If you chuck enough monetary stimulus at an economy something happens.

“It is as if we have had a cracking great hangover, had a stiff drink and off we go again.”

He said the economy has reverted to its pre-crisis model of growth based on property and financial services without the “rebalancing” it needs.

Turner said: “We have spent the last few years talking about the need to rebalance the economy away from a focus on property and financial services and towards investment and exports. We are now back to growth without any rebalancing at all.”

Turner was chairman of the FSA between September 2008 and March 2013.

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  1. Actually Turner is talking a great deal of sense here. However, the government will be loath to tackle the problem (even if it has noticed it) in the run up to an election.

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