Ed Balls MP, Labour's Shadow Chancellor, said in response to the OECD downgrading its forecasts for UK growth in 2011 and 2012 and the ONS confirming its figures for growth in the first quarter of 2011:
“Today’s figures confirm that the economy has entered a more difficult phase.
“The OECD’s latest downgrade of its forecast for growth this year and next year is concerning. George Osborne now faces the prospect of the Office for Budget Responsibility’s growth forecast for 2011 being downgraded a fourth time. Growth of just 1.4 per cent this year compares to the independent Office for Budget Responsibility’s forecast of 2.6 per cent growth before George Osborne decided to cut further and faster.
"The figures from the ONS confirm that in the six months since George Osborne's spending review and VAT rise the economy has flatlined. By making a political choice to cut further and faster than any other major economy this Conservative-led Government has choked off the recovery when it should have been secured. And the economy has flatlined before the bulk of the spending cuts and tax rises have kicked in.
“By cutting too far and too fast the Tory-led Government risks getting us into a vicious circle. Slow growth and more people out of work and on benefits will make it harder to get the deficit down. That's why the Government is now forecast to borrow £46 billion more than they were expecting last autumn and we’ve just seen record borrowing for the month of April.
“There is a better way. Labour’s balanced deficit plan would put jobs first because getting people off the dole and into work is the best way to get the deficit down. And instead of giving the banks a tax cut this year, the Government should repeat the bank bonus tax to build thousands of new homes, get young people into work and support small businesses.”