The economy started to recover from the recession in the last quarter of 2009. This recovery had nothing to do with the cuts, because they had not happened. The two most likely causes were the 21% depreciation of sterling against competitor currencies, and a £200bn injection of cash into the banking system, starting in February 2009. However, there is no golden light at the end of the tunnel.
That\’s the hyper-Keynesian, M\’Lord Skidelsky, there.
And he\’s saying that that first recovery from recession was nothing at all to do with Keynesian (as in, the crude Keynesianism of many, let\’s just spray more money at public services) actions, it was all to do with exactly what the monetarists, neo-liberals and other assorted righties would say we should do.
Devalue the currency and as we\’re up against the zero interest boundary, expand the money supply.
It\’s also actually what Keynes himself would have recommended: the spending, the aggregate demand side, only come after you\’ve done all of the monetary stuff.