Financial News

  • 29 January 2014, 3:47

Ed Balls Says Stronger Recovery Is Needed

The shadow chancellor says the growth in the UK economy is welcome, but it is the wrong kind of recovery.

The latest GDP figures show the country's economy grew by 0.7% in the final quarter of last year.

For 2013 as a whole, it increased by 1.9%, showing Britain's strongest growth since the financial crisis began in 2007.

The figures give a boost to the Chancellor and comes a week after the International Monetary Fund (IMF) upgraded its growth forecast for the UK economy.

But Ed Balls is less optimistic about the growth, telling Sky News: "This is not yet the strong and balanced recovery we need.

"It's not a recovery driven by business investment - that's still very flat - or by exports - they've been weak -  what's going on at the moment is consumers are saving less and consumer spending is picking up somewhat. That's happening because housing demand and house prices are going up.

"We're not building the houses we need to match that that's why construction output is still falling. There's a lot more to do."

Mr Balls added: "For working people facing a cost-of-living crisis this is still no recovery at all."

But Chancellor George Osborne said the figures showed the Coalition's economic policies were delivering a "brighter economic future".

He told Sky News: "I think these numbers represent a real boost to the economic security of hard-working families and the good news is that the recovery is broadly balanced with manufacturing growing the fastest of any sector - so there is evidence that our long-term economic plan is working.

"But I'm the first to say the job isn't done and the biggest risk to the recovery would be to come off that economic plan and that would damage job creation and mean we don't have such bright economic prospects."

Speaking in the Commons Mr Balls said of his counterpart: "Why can't he admit the truth? He's failed to get the deficit down and since he came to office, working people aren't better off, they're worse off."

But the Chancellor was roundly cheered by Conservatives as he took to the Despatch Box, where he said Labour was "anti-the British people" and challenged the Opposition to explain how its "anti-business rhetoric" would help the economy.

Mr Osborne taunted Mr Balls, saying: "He predicted there would be no economic growth unless we borrowed and spent more, he has been wrong about all of those things.

"Mr Speaker, what they need on the other side of the House is new Crystal Balls."

Mr Balls replied: "Very good Chancellor, a joke about my name being called Balls. Fabulous."

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