David Hanson MP, Labour's Shadow Treasury Minister, responding to today’s downgraded growth forecast from the CBI and the manufacturing Purchasing Managers Index for July, said:
“If the CBI’s forecast comes true, then growth this year will be just half the rate forecast a year ago before George Osborne’s first Budget. This would be bad news not just for families and businesses, but for the deficit too because slower growth means borrowing targets for this year are unlikely to be met.
“This downgraded forecast relies on growth of 0.8 per cent in the third quarter. But the survey figures for July are concerning, given that we all want to see a strong role for manufacturing in getting our recovery back on track.
“Tearing up Labour’s plan to halve the deficit over four years and trying to cut further and faster than any other major economy was always a very risky gamble. Last year’s recovery has already been choked off, leaving us in a weak position if things go wrong in the Eurozone or America. A plan is only credible if it delivers and the evidence is growing that George Osborne’s rash plan is not delivering.
“As Ed Balls warned in his LSE speech, a long period of slow growth will leave a permanent dent in our nation’s prosperity. That’s why the government must take urgent action now to get our economy moving again, including a temporary VAT cut and repeating the bank bonus tax in order to build thousands of affordable homes and get young people off the dole and into work.”