British Labour Party seeks curb to spending cuts
London, England, United Kingdom (AHN) – Britain’s Labour Party called on Chancellor George Osborne to curb the coalition spending cuts because of the economic slowdown the austerity measures caused.
The party cited the major dip in manufacturing and mortgage approvals as proofs of the threat of a double-dip recession. Britain’s purchasing managers’ index went down to 52.1 in May from 54.4 in April. The May figure is the weakest month in about two years, which indicates modest expansion only by the manufacturing sector.
For April, the Bank of England reported that mortgage approvals went down to a four-month low, amid a dip in business lending. Mortgage approvals decreased to 45,166 while consumer credit went up by only $750 million (GBP 500 million).
With these weak figures, the British Chambers of Commerce cut its growth forecast for the U.K. The chamber downgraded on Wednesday its outlook for 2011 to a 1.3 percent growth from 1.4 percent, and 2.2 percent from 2.3 percent for 2012.
In the same week, the Organization for Economic Cooperation and Development cut its 2011 growth forecast for Britain to 1.4 percent from 1.5 percent. The two forecasts are much lower than the 1.7 percent projection by Britain’s Office for Budget Responsibility.
While BCC lowered its growth forecast, the chamber increased its forecast for the country’s inflation rate to 4.5 percent this year from 4.2 percent in March. The BCC predicts unemployment will go up by about 150,000 for the next 15 months.
The BCC explained its revised outlook to inflation and the coalition government’s austerity program.
However, not all the declines were because of the coalition government’s spending cuts. Some of its are because of an extra bank holiday in April and the impact of the Japanese industrial shutdown after the March 11 earthquake.
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