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The conservative UK government continues to push for cuts in government spending in the face of a weak recovery. The Financial Times has argued that government policy will only make the economy worse. The government, however, believes that fiscal austerity will improve business confidence and help to stimulate the economy. Their belief in the "confidence fairy" is very similar to that of conservatives in the US.
This article does not mention the recent inflation numbers in the UK. Despite the weak economy, and falling wage income, inflation is over 4% in the UK. Well below the 2% target rate. It is driven by rising commodity prices and increases in the prices of some common household items. This may make it difficult for the Bank of England to keep interest rates at their current level. If the central bank if forced to raise interest rates, the economy will be hit with a double whammy. Fiscal austerity and higher interest rates will slow growth even further.
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