Kerry McCarthy MP, Labour’s Shadow Treasury Minister, said in response to today’s figures showing CPI inflation increasing to 4.4 per cent:
“It is very worrying that inflation is more than double the Government’s target rate and rising.
"Rising world commodity prices are partly to blame. But things have been made much worse in Britain by George Osborne’s big rise in VAT, which is due to his decision last year to cut the deficit too far and too fast.
"George Osborne should temporarily reverse his mistaken VAT rise, which is costing a family with children an average of £450 a year.
"Our economy has flatlined since last autumn – well before the recent instability in the global economy.
"The Chancellor needs to realise that his reckless and incautious policy of tax rises and spending cuts which go too far and too fast has squeezed incomes and crushed confidence leaving Britain vulnerable in the face of the global economic problems we are now seeing. The Managing Director of the IMF, Christine Lagarde, is right to say that 'slamming on the brakes too quickly will hurt the recovery and worsen job prospects'.
"A temporary VAT cut now would ease the squeeze, give this stalled economy the jump start it urgently needs and so help get the deficit down for the long term."