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Page last updated at 09:16 GMT, Tuesday, 13 March 2012

US vs UK on economic recovery

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David Cameron is arriving in Washington for talks with Barack Obama on a trip where foreign affairs as well as economics are on the agenda.

Recent economic data from the US suggests that the green shoots of recovery are evident.

David Blanchflower, professor of economics at Dartmouth College, New Hampshire, told the Today programme's Evan Davis that he believes that President Obama will run a presidential campaign saying that the experiment of austerity in Europe "is the wrong way to go".

"The US has been talking about austerity but hasn't done it yet," he said, adding that there has not been a big decline in government employment and the private sector is starting to create jobs, which is not the case in the UK.

"In the US, you hear people being positive about the economy," Prof Blanchflower said.

But Sir Howard Davies, former head of the Financial Services Authority, disagreed and said that in actual fact, there is "very little difference" in GDP per head between the US and UK.

He conceded that the US is picking up more rapidly but maintained this is because the UK is "in a bad neighbourhood" in being tied to Europe in terms of our exports.

Sir Howard added that encouraging people to believe that finances will be put in order in time, and interest rates will be kept low is a good message for the private sector.


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