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Darling: I was right to forecast growth

Joe Murphy, Political Editor
17.06.09

A confident but cautious Alistair Darling will tonight reaffirm his forecast of economic growth by the end of the year.

In his annual Mansion House speech to the City, the Chancellor strikes an optimistic note about the end of the recession coming into sight.

"There is still a great deal of uncertainty in the global economy," he was expected to say. "And we must remain cautious.

"There is growing evidence that the steps taken, at home and internationally, are stabilising the banking system and supporting our economies and this is in line with my Budget forecast for growth around the turn of the year."

Mr Darling will highlight the risk of oil price rises and further banking turmoil in Europe but will say: "If we remain vigilant, and take action wherever necessary, I am confident there will be a sustained recovery."

Earlier, Mr Darling deepened the Cabinet dispute over spending when he refused to endorse the Health Secretary's pledge that the NHS budget will keep going up.

The Chancellor refused four times in a radio interview to say Andy Burnham was right to insist health spending would continue rising after 2011.

He told BBC radio: "I quite deliberately said at the Budget that I was not going to make allocations in individual departments after 2011 now because of the uncertainty over the economy."

Mr Burnham wants a commitment to higher NHS spending from 2011 to put the Tories on the spot. He said last week: "I am committing to you that we will continue to maintain growth in health spending."

At Prime Minister's Questions, Gordon Brown claimed the Tories would cut 10 per cent off most budgets, saying: "You are the party of cuts. We are the party of investment."

But David Cameron said that once unemployment and government debt costs were deducted, the Government's own figures showed cuts were inevitable: "You are just sinking and sinking."

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