Angela Eagle MP, Labour’s Shadow Chief Secretary to the Treasury, responding to NIESR’s prediction of growth of just 0.7% in the first quarter of 2011 and underlying growth in the last six months of just 0.1%, said:
“Families facing a big squeeze on their incomes this week know that cuts which go too deep and too fast are hurting, but the evidence is now growing that they’re also not working.
“Our economy should not only be making up all the lost ground from the end of last year but growing strongly on top of that. But this disappointing forecast from NIESR would mean that over the last six months, and since George Osborne’s spending review, the recovery has ground to a halt and our economy has barely grown at all. More worryingly, NIESR’s prediction is lower than the Office for Budget Responsibility’s three times downgraded forecast just two weeks ago.
“The decline in industrial output last month, record low consumer confidence figures and poor retail sales add to the concerns. And this is before the bulk of the deep spending cuts and tax rises which start this week start to bite.
“A year ago, before George Osborne ripped up our plan to halve the deficit steadily over four years, the economy was starting to grow strongly and unemployment was falling. But by going too far and too fast George Osborne has delivered lower growth and higher unemployment. That’s a vicious circle because the Tory-led Government will now have to borrow £46 billion more than planned.”