Angela Eagle MP, Labour’s Shadow Chief Secretary to the Treasury, responding to today’s inflation and retail sales figures, said:
“The fall in food prices which has seen inflation come in lower than expected is welcome. But thanks in part to George Osborne’s VAT rise inflation is still running at double the target rate.
“Across the country millions of people on low and middle incomes are being squeezed from every direction by rising prices made worse by the Tory VAT rise and from this month cuts to tax credits, cuts to childcare support and a child benefit freeze. It’s no wonder consumer confidence is at a nearly 20 year low and retail sales are suffering a sharp decline.
“And to make matters worse George Osborne’s own goal in raising VAT at a time of rising world food and oil prices continues to threaten a rise in mortgage rates for homeowners.
“A year ago the economy was starting to grow strongly, unemployment was falling, inflation was lower and so borrowing came in £21 billion lower than forecast. The economy should be growing strongly this year, but all that changed when George Osborne came in and decided to cut further and faster than any other major country. Britain now faces the worst of all worlds with rising unemployment, high inflation and slow growth. The result is that borrowing will actually be £46 billion higher than expected.
“We know that cutting too deep and too fast is hurting, but the signs are that it isn’t working either. It’s time George Osborne understood that and thought again.”