View more on these topics

George Osborne under fire over 0.3% drop in GDP

George Osborne 480

Politicians and economists have lined up to attack chancellor George Osborne after Office for National Statistics data showed the UK economy shrunk by 0.3 per cent in Q4 2012.

UK gross domestic product had grown 0.9 per cent in Q3 2012 after a boost from the Olympics but concerns are now growing that the country may plunge into a triple-dip recession with negative growth in Q1 2013.

Shadow chancellor Ed Balls attacked Osborne and prime minister David Cameron of “dangerous complacency”.

He says: “Today is the moment when David Cameron and George Osborne’s complacency is completely exposed. These deeply disappointing figures expose just how dangerously complacent the prime minister was when he said last autumn that the ‘good news will keep coming’.  

“Cameron and Osborne have been asleep at the wheel. They’ve spent the last six months obsessing about a referendum in five years’ time, not focusing on the problems in our economy today.”

National Institute of Economic and Social Research director Jonathan Portes also hit out at Osborne’s spending plans.

He says: “The main issue is not whether there is a double or triple dip recession but the trend of no growth over the last two years.

“It’s a combination of poor fiscal and financial policy from the Government and huge policy mistakes by EU Governments. Both have implemented bad policy and the interaction between the UK and EU is doing much of the damage.”

Osborne, who has spent the last two days at the World Economic Forum in Davos, told Sky News the figures were a reminder of the “difficult” economic situation caused by recession in the Eurozone and debt built up over many years.

He said: “Now we can either run away from those problems or we can confront them and I’m determined to confront them so we can go on creating jobs for the people of this country.”

Deputy prime minister Nick Clegg also admitted today that he regrets cutting capital expenditure so much. Labour seized on the remarks as the first admission of “serious mistakes”.

Yesterday International Monetary Fund chief economist Oliver Blanchard said the March Budget should be used to “take stock” of spending plans and end austerity.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm