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Economics

Britain's Austerity Finally Leads to Economic Growth

Slashed budgets, layoffs, and wage cuts pay off

The U.K. government under Prime Minister David Cameron and Chancellor of the Exchequer George Osborne has championed austerity, rather than Keynesian pump-priming, as the solution to the economic downturn. Now Britain’s own bruising experiment with austerity is starting to pay off.

Figures released on April 29 show the economy expanded 0.8 percent in the first quarter, up from 0.7 percent in the fourth. That performance puts Britain on track to have the fastest-expanding economy among the Group of 7 developed nations this year. The economy grew at an annual rate of 3.1 percent as of the end of the first quarter.