The shadow chancellor John McDonnell has launched a stinging attack on George Osborne’s economic policy after the Organisation for Economic Co-operation and Development (OECD) slashed its growth forecasts for the UK economy.
The OECD said it now expects the UK to grow by 1.7 per cent this year, down from a prediction of 2.1 per cent made three months ago. However, the biggest story from the OECD was its warning that Brexit could trigger chaos across the global financial markets and reduce the UK’s potential GDP by three percentage points over the next four years.
Labour, however, is not prepared to let the chancellor off the hook for what it sees as his broader failure to steer the UK economy in the right direction.
McDonnell said: “Today’s OECD report once again shows the absolute failure of the chancellor’s economic policy … Further proof that George Osborne’s recovery is built on sand.
“It’s clear that we can’t risk failed Tory economic policy any more. We need a serious commitment from this government to invest in infrastructure and housing, backed up by a real industrial strategy.”
Osborne, however, focused on the group’s referendum warning, calling it “another wake up call of the grim consequences of leaving the EU and the single market”.
A separate forecast released yesterday by Societe Generale showed George Osborne is set to miss his target of a budget surplus by tens of billions of pounds. Economists at the investment bank think the budget deficit will bottom out at 2.9 per cent of GDP, rather than the slight surplus Osborne has targeted by the end of this parliament.