UK economy at near-standstill as uncertainty over the budget and high interest rates weighed on consumer spending
The government did not put anybody up in the media round this morning in order to defend the weak GDP figures, but recently appointed Conservative shadow chancellor Mel Stride was across the airwaves to react to them.
He said he had concerns about growth going forward after seeing the figures. He told viewers of Sky News:
If you look at the OBR forecast around the budget, it shows growth being lower across that forecast than it would have been under us back in the spring.
We saw that in what are called PMI surveys of business confidence, and they pretty much plummeted not long after the government came into office. And I think some of that, at least, is what you’re seeing feeding through.
But I think the longer term is equally worrying, because, of course, what the government has done is ramped up taxes on business, national insurance, that’s going to depress wages, increase unemployment, it’s going to lower growth. You’re going to see higher inflation as a consequence, and higher interest rates. And these are things that are not good as an outlook for the future
At my budget, I took the difficult choices to fix the foundations and stabilise our public finances. Now we are going to deliver growth through investment and reform to create more jobs and more money in people’s pockets, get the NHS back on its feet, rebuild Britain and secure our borders in a decade of national renewal.
I think a lot of that is because this government, on coming to office, talked down the UK economy.
And it did that because it always planned to jack up taxes in the way that it has in the budget, and wanted to make out there was a bigger problem than there was.
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