Angela Eagle, Labour’s shadow chief secretary to the Treasury, said in response to the National Institute of Economic and Social Research’s latest UK economy forecast:
“This report is yet another warning sign to a Conservative Chancellor who seems to be in denial.
“When Labour left office growth was picking up, unemployment was falling, inflation was low and the deficit came in over £20 billion lower than forecast. But the NIESR’s report shows that the economy has taken a turn for the worse since George Osborne made the choice to pursue a different course by cutting the deficit too far and too fast.
“This report predicts that economic growth is set to slow down and will be significantly lower than forecast since the Tory-led government’s emergency budget and spending review last year. It says that inflation will be higher this year than the Office of Budget Responsibility forecast in the autumn before the VAT rise. And it endorses the growing calls for the Chancellor to boost rather than hamper the recovery by going more slowly on his austerity plans.
“It’s time for George Osborne to get his head out of the sand, look at the facts and rethink his reckless plan to take another £20 billion out of the economy in April on top of the VAT rise. He needs a plan B and he needs one quick.”