Mr Major’s Comments on the Economy – 3 January 1993

Below is the text of Mr Major’s comments on the economy, held during an interview held on Sunday 3rd January 1993.

QUESTION:

[Mr Major was asked whether 1993 would be a year of economic recovery].

PRIME MINISTER:

I think it will move at a different pace. I think what we see as we move into 1993 are the conditions in place that will re-engender confidence, encourage people to spend, to invest and the recovery to begin and I think that is generally the view of industry and commerce. I think it will be gentle. I don’t suddenly imagine we are going to be bounding into a speedy recovery and frankly, that is a good thing because the one thing we don’t want to do is to move so fast into it that we create problems two years down the road; so I think it will be gentle, it will accelerate and I hope we will have a larger level of growth in 1994 than we expect in 1993.

QUESTION:

[Mr Major was asked what he forecast growth to be in 1993 and 1994].

PRIME MINISTER:

Forecasts are dangerous things, as we have found in the past. One always has to make a series of assumptions, a series of judgements, and they can be quite significantly out – they have been for every Chancellor over the last quarter of a century – but our forecast is for a gentle growth of around 1% this year, some think it will be exceeded, some think it is about right. It is too early to be certain about that but that there will be growth I think is increasingly apparent and I think it will accelerate after 1993.

QUESTION:

[Mr Major was asked if that was a trend, and whether growth in 1994 might therefore be 2.5%].

PRIME MINISTER:

I hope we are going to move in that direction, yes. We will have a look again at the forecasts later in the year as we see how 1993 begins to develop but I think we need to move back to trend growth. The recession was longer than we expected and it was deeper than we expected and one of the reasons for caution about how rapidly one will come out of recession is not so much what is happening in this country but what is happening in our principal markets abroad because as we show signs of coming out of recession some of our partners in Europe are perhaps seeing their economies still slowing down.