Invest says Yanis as he brands Osborne '˜hapless'

The firebrand economist told the Press Association that Prime Minister Theresa May and Philip Hammond must abandon austerity and ramp up investment if they hope to get the economy back on track following the Brexit vote.

“George Osborne was caught in a trap of his own making, he kept repeating his commitment to bringing the budget into surplus by 2020, by means of austerity. Every time he cut public spending as a percentage of GDP the public sector borrowing requirement increased.”

Mr Varoufakis, who served in Greek prime minister Alexis Tsipras’ government through the country’s sovereign debt crisis, during which he lambasted the European Union, said that if Britain is to avoid a recession, it should set up a publicly-owned investment bank.

“My last estimation is that there are £900 billion sloshing around in financial institutions, not being invested in productive activities.

“How do you energise that £900 billion? My view would be that Britain needs an investment bank. A publicly-owned, but not politically-guided, investment bank, which issues bonds that the Bank of England purchases.”

He explained: “If you look at the current account deficit, if you look at the relative growth of demand and supply, and if you look at the diminishing of job quality, the quality of jobs in Britain, it’s clear that you need a major boost in investment.”