How could the government 'jumpstart' the economy?

What can he do?

After the recent announcement that in the last quarter the UK's economy receded by 0.2%, the distinct possibility of another recession is looming. Many have been calling for the government to intervene into the economy. Bu, what could they do and would it work?

One such way in which the government could intervene is through the process of quantitative easing. (I.E printing money) This wold allow the Bank of England to increase the value of government assets whilst maintaining the low 0.5% interest rate. However, quantitative easing may also lead disillusioned; banks, investors and businesses to simply sit on the money and save it for when there is an upturn in the markets fortunes.

A widely spoken about option recently has been to cut people taxes in the form of income tax cuts. This would enable the poorer section of the economy to have more money to spend and therefore provide an injection of funds into the economy. What income tax cuts do rely on however, is the 'poor' spending this extra income rather than paying of depts or saving it. This therefore is a major flaw of this form of government stimulated economic growth.

My final but probably least likely way in which the government can kick start the economy is to 'stoke inflation'. This involves giving people to hoard cash something even greater to fear by hiking up inflation. By rising prices people may be encouraged to do something more productive with their money like spending it. The flaw? Well although hypothetically stoking inflation is all well and good it is highly unlikely that it can actually be achieved and even less probable in the time period that the government so likely desires.

Although, all forms of government intervention have their benefits, most such as toking inflation are implausible and not feasible under current economic conditions. This means that feasibly to improve the UK's economy the government needs to: Inject money into the economy

                                 Improve the confidence of both the consumers and producers so that more money is spent.