Chancellor to revise previous predictions of recovery for the second half of this year
Chancellor Alistair Darling has warned that Britain is “far from through” the recession, according to reports.
The statement was made yesterday in an interview with the Financial Times and signalled that he will be forced to abandon the government’s forecast that the recovery would begin in the second half of 2009.
Economic data has suggested that the chancellor’s forecasts last November, which said Britain was now at the midpoint of a one-year recession, were over-optimistic, and would have to be amended in the spring’s Budget.
Darling said the predictions had been “based on the evidence we had at the time”.
The chancellor criticised the Conservatives’ proposals to cut public spending by £5bn next year, labelling it “utter madness”. Instead, he maintained that the government’s £20bn fiscal stimulus was the correct way to help the economy.
Darling is expected to announce a package of measures aimed at supporting bank lending to business in the coming weeks.
On Thursday, the Bank of England is expected to slash interest rates to their lowest point for 300 years.