Definition of Balanced Growth:
“Balanced Growth refers to a specific type of economic growth that is sustainable in the long term. Balanced growth is opposed to the boom and bust nature of economic cycles.”
It was felt the UK had balanced growth between 1993 and 2007 – a long period of economic expansion and low inflation.
However, the credit crunch of 2007, showed the growth wasn’t as balanced as previously thought. Despite low inflation, there was a boom in bank lending and growth of credit. There was also a boom in house prices which got reversed from 2007.
So, why has EDDC chosen “economic growth” which is highly susceptible to boom and bust, particularly in the housing market, where a change in mortgage interest rates could lead many people into negative equity?