Ed Balls MP, Labour’s Shadow Chancellor, said in response to the IMF’s World Economic Outlook published today:
“These are deeply concerning forecasts for both the UK and world economy. Our Chancellor and political leaders in Europe need to wake up to the scale of the problem and finally realise that we need economic growth and more people in work to really get deficits down.
“As the Standard and Poor’s statement makes clear, Italy’s credit rating has been downgraded because of weakening growth, with austerity measures being one of the reasons they say is behind this, and a lack of political agreement in parliament.
“The IMF is right to warn that we need credible medium-term plans to get deficits down, but that doing it too quickly puts jobs and economic recovery at risk. That’s exactly what we have seen here in Britain where spending cuts and tax rises that go too far and too fast have crushed confidence, pushed up unemployment and choked off the recovery last autumn. Far from being a safe haven, as George Osborne complacently claims, only Japan in the G7 has grown more slowly than the UK in the last 12 months.
“The IMF is saying very clearly that if slow growth continues in the UK the Government should change course and adopt steadier deficit plans. But since this is now the third time this year the IMF has downgraded its forecasts we can’t afford to just sit back and wait for things to get worse.
“Families and businesses want to see action now, to get the economy growing and get people back to work, not politicians sitting on their hands. That’s why we need a real plan for jobs and growth, here in Britain and around the world, and we need it quickly.”