The economy shrank by 0.7 per cent between April and June, the Office for National Statistics said. It is now smaller than when the Coalition came to power in 2010.
Since then, the Chancellor has pursued a strict policy of austerity – “Plan A” – in an attempt to bring down the deficit, leading to accusations that he has not done enough to stimulate growth.
Wednesday’s fall was worse than expected and means that Britain is firmly back in recession, with negative growth for the past nine months.
Amid a growing clamour from business groups for radical action, one senior Conservative figure admitted that the economy was likely to be in “intensive care” for another two years.
Vince Cable, the Business Secretary, called for a “Plan A plus” as he suggested that austerity alone was not enough to bring the country out of recession.
Business groups want extra help for companies struggling to raise money, a more radical infrastructure plan, a National Insurance holiday for employers and assistance with local business rates.
Small business organisations also called for political parties to work together in a “grand national bargain” to stop Westminster disagreements undermining the economy. Read on and comment » | Robert Winnett, and James Kirkup | Wednesday, July 25, 2012
THE DAILY TELEGRAPH: Vince Cable: I would 'probably' make a good chancellor - but I'm backing George Osborne – Vince Cable, the Liberal Democrat Business Secretary, has admitted that he would like to be chancellor but said he was backing under-fire George Osborne to stay in his job as the OECD tells Britain to stick to Plan A. » | Rosa Prince, Online Political Editor | Thursday, July 26, 2012
