Angela Eagle MP, Labour's Shadow Chief Secretary to the Treasury, said in response to the Bank of England’s quarterly inflation report downgrading the forecast for UK economic growth:
"On this first anniversary of the coalition, the Governor of the Bank of England has made a revealing admission. He said that a year ago he expected the economy to have grown by 1.5 per cent over the last six months. But in fact over that period and since George Osborne’s spending review and VAT rise the economy has flatlined and shown zero growth.
"Cutting too deep and too fast, as this Conservative-led government is doing, is a vicious circle. The slower growth, higher unemployment and higher inflation George Osborne’s policies have delivered mean the government will now have to borrow £46 billion more than they were planning just a few months ago. In contrast, a year ago, Labour's plans to support the recovery saw the economy start to grow strongly, unemployment fall and borrowing come in over £21 billion lower than forecast.
"This latest downgrade of the growth forecast from the Bank of England follows three downgrades by the Office for Budget Responsibility. A year ago the OBR was predicting growth of 2.6 per cent under Labour’s plans, something which now looks like an impossible prospect. As the Governor rightly noted the UK economy is still four per cent below the level it was at before the global financial crisis, while GDP in the US has now surpassed its pre-crisis peak.
"David Cameron, Nick Clegg and George Osborne need to think again. It’s time they realised that we need strong growth and more people in work, paying taxes rather than claiming benefits, to get the deficit down in a sustainable way. We know their reckless policy of cutting too deep and too fast is hurting, but the evidence is growing that it isn’t working."