POLITICIANS on all sides downplayed the likelihood of a double dip recession following the shock fall in economic output announced yesterday.
Shadow chancellor Ed Balls said people had already “changed their behaviour in anticipation of what’s coming in the future” and said: “I don’t think [a double dip] is the most likely outcome.”
However, Balls said the economy was now feeling the impact of the coalition’s austerity measures.
“The fact is cuts which go too far and too fast will damage our economy,” he said.
Chancellor George Osborne admitted the GDP figures were “obviously disappointing,” although used a newspaper column to suggest the snow had severely impacted economic growth at the end of last year.
He said: “The coldest December on record had a much bigger impact on the economy than anyone had forecast.”
The impact of the severe weather was, however, downplayed by Commons Treasury Select Committee member Chuka Umunna. He tweeted: “Even accounting for the snow today’s ONS figures show the Conservative led government has no policies for growth – a government of bystanders.”
But Osborne yesterday insisted the government would maintain its current economic approach.
“We cannot afford to be blown off course by bad weather,” he said.