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Darling: Economy will bounce back in 2010
Paul Waugh, Deputy Political Editor13.11.08
BRITAIN will suffer a short, sharp recession next year, Chancellor Alistair Darling signalled today.
In the first real glimpse at this month's pre-Budget report, Mr Darling seized on forecasts by the Bank of England that growth will bounce back in 2010 after the nation weathers the downturn.
He suggested that the economy would contract by more than one per cent next year but recover within 12 months.
But the Government's confidence in the resilience of the economy came under fire when former prime minister Sir John Major unleashed a savage attack on Labour's failure to prepare for bad times.
Sir John said that "new Labour has as much financial blood on its hands as any erring banker", pointing out that Gordon Brown ignored spiralling debt, weakened regulation of the City and fuelled the housing boom.
In an interview with the Independent, Mr Darling said: "We are going into recession. I remain confident that we will get through it."
The Chancellor made clear that his Commons statement on 24 November will reveal a dramatic increase in borrowing, expecting to soar from £43billion to more than £65billion. As the recession hits, borrowing will soar above £90billion.
Bank of England Governor Mervyn King warned yesterday that Britain faced an even sharper recession than that of the early Nineties.
Mr Darling said: "The Bank of England expects the economy to come back out of it in 2010. I think things are difficult but I remain confident we will get through it. There is a way to go yet. There will be a few bumps on the way.
"We have had 10 years of very solid growth in this country. We reduced the debt we inherited and spent money where it was needed We also go into this period with interest rates the lowest since the year after I was born [1953]. Inflation is coming back down."
Reader views (8)
Yeah nasty it will be - thanks to this Nu Labor bunch being very ill prepared and nationalising everything. I acnnot wait for the election - whenever Mr. Bean Brown will. SHort it cannot be because of the mess that Nu Labor led us into with their over-lending.
- Steveo, London NW1
Darling has not become as much a stanger to the truth as Brown. The camel's back has broken and I find it impossible to believe anything Brown says. I have the feeling, however misguided it might be, that Darling still wants to tell the truth.
- Alex C, London
And pigs might fly. How can a nasty bunch of communist who hate everything and anything decent and proper, who were so full of themselves filling-their-boots to see a major down turn really give any advice. It's just lies and spin, spin and lies. Wake-up people please.
- Mike, London
Darling prediction is like his boss's assertion that he fixed boom and bust.
- James, LONDON
Why did they cause it in the first place. Their grand dreams of free for all has not worked. There soon will be no more taxpayers as Nu Labor has messed up. The kitty is empty just now as we need it...
- Georgie, Islington, London
Oh that's alright then, no worries. So Labour can carry on borrowing and giving hand-outs to "poor" families", cause everything will sort itself out by 2010.
- Delphine, Oxford
Ok, let's hold Darling to his promise. We all have longer memories than the average politician and goldfish, so will be more than happy to remind him of his daft prediction.
- Nobby Clark, Perth, Scotland
Brown and Darling have the effrontery to start forecasting the end of this recession! All this Government's forecasts have been either lies or just plain wrong-for example, they promised that 13,000 EU immigrants would come here when we all know nearly a million is the true number. Now, with a disastrous low interest rate 'solution' they say they have defeated inflation! We need higher, not lower, interest rates- to encourage saving and inward investment and maintain the value of sterling-so what does Gordon do? Boast how by lowing interest rates he is saving the economy- by attempting to stoke up a property boom again with cheaper mortgages-when it is the obsession with house prices which were one of the reasons for the current crisis. When can we have someone leading this country who knows what he is doing?
- Jon Kent, Hertford. UK
