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The alarming slump in business investment

There will be an economic price to pay in the future

By Paul Wallace  

Photo: Artur Widak/NurPhoto

When TS Eliot wrote: “Time present and time past are both perhaps present in time future,” he didn’t have business investment in mind. But the opening lines of his poem “Burnt Norton” capture why this component of the economy, which makes up a tenth of GDP in Britain, matters. When firms invest in plant, equipment and vehicles, improve computer systems and carry out research and development, such spending both contributes to GDP today and expands future capacity, including for innovative products and services. That’s why persistently low and now acutely weak business investment is a cause for concern.

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