Double-dip doubted as Balls slams austerity
Economists are questioning whether Britain is really in a double-dip recession, as Labour makes the most of yesterday's news.
Preliminary figures from the Office for National Statistics released yesterday put GDP growth for the first quarter of 2012 at minus 0.2%. Added to the 0.3% contraction in the last three months of 2011, Britain is once again technically in recession.
Shadow chancellor Ed Balls has mounted a media offensive in the last 24 hours in which David Cameron and George Osborne's economic policies have been blamed for the setback.
"This is a recession made in Downing Street by David Cameron and George Osborne," he told Sky News yesterday.
"It is their responsibility, they can't blame anybody else."
This morning he continued the attack, telling ITV1's Daybreak programme that the coalition had not heeded his warning that pushing through spending cuts and tax increases too quickly would "backfire".
"Their plan has categorically failed, families and businesses are now really paying the price," Mr Balls said.
"That self-defeating austerity has put us through such pain and we need an alternative plan. We've got to get jobs and growth moving, they should've done this much earlier."
His criticisms came as many economic analysts doubted whether the preliminary figures would eventually prove accurate, however.
Howard Archer, Chief UK & European Economist at IHS Global said: "For what it's worth, we strongly suspect that sometime down the line that the GDP data will be revised up to show modest growth in the first quarter, but by then the recession headlines will have been written."
The Ernst and Young Item Club's senior economic adviser Andrew Goodwin said: "Our reaction to these figures is one of disbelief. The divergence between the stronger survey data and dire official output estimates is virtually unprecedented and must raise significant question marks over the quality of the data."
John Cridland, director-general of the CBI, said that the news of a double-dip "comes as something of a surprise".
"Since the turn of the year, business confidence has improved and, while still challenging, underlying economic conditions also appear to have strengthened," he commented.
The ONS will publish its revised assessment of GDP growth for January to March this year on May 24th.
