Angela Eagle MP, Labour’s Shadow Chief Secretary to the Treasury, said in response to today’s figures showing CPI inflation running at 4.5 per cent:
“It’s now time George Osborne took some responsibility for the fact that inflation is still running at more than double the government’s target rate. While rising commodity prices across the world are partly to blame, prices have also been pushed up this year by George Osborne’s hike in VAT – a consequence of his decision last year to cut the deficit too far and too fast.
"People on low and middle incomes are being squeezed from every direction – not just by rising prices and the VAT rise, but also the government’s cuts to tax credits, cuts to childcare support and the child benefit freeze. And as the IFS' report says today rising prices hit pensioners and the poorest hardest.
“The VAT rise looks increasingly like an own goal as high inflation continues to threaten a rise in mortgage rates for homeowners. And the higher inflation, higher unemployment and slower growth which George Osborne’s policies have delivered risk a vicious circle in our economy as the government is set to borrow £46 billion more than it planned.
“The Bank of England has been put in an impossible position by George Osborne. It has been left to do all the work to support a recovery that's been choked off by the Tory-led Government’s fiscal policy to cut deeper and faster than any other major economy in the world."