McDonnell: Growth forecast cuts show Osborne’s austerity is driven by ideology

The latest economic growth forecast cuts from the Bank of England and the European Commission go to show that George Osborne’s austerity agenda is not working, John McDonnell said today.

The latest Inflation Report from the Bank of England cut the GDP growth expectation today, in a move the Shadow Chancellor has described as “unwelcome”.

McDonnell slammed Osborne failure to realise sooner the growing financial insecurity internationally. “It’s unwelcome that both the EU Commission and the Bank of England have cut their expected growth forecasts for the UK,” he said. “Labour has been cautioning for several months now about growing global uncertainty, something that George Osborne has only woken up to recently.”

He also noted that the Bank of England’s Governor Mark Carney had blamed the reforecasting on the Government’s spending cuts. He said:

“We should be particularly concerned that, in Mark Carney’s own words, the “accelerating fiscal consolidation” is part of the reason for why UK growth is expected to dip below past averages.

“This is further evidence that the Chancellor’s austerity programme is driven by ideology and could be undermining the potential of the UK economy.”