UK economy is turning a corner says George Osborne

The UK economy is "turning a corner", George Osborne will declare today in his most upbeat assessment yet about the country's prospects

Andrew Milligan/PA Wire Chancellor of the Exchequer George Osborne
Chancellor of the Exchequer George Osborne

The UK economy is "turning a corner", George Osborne will declare today in his most upbeat assessment yet about the country's prospects.

In a bid to capitalise on a slew of positive signals, the Chancellor will hail “tentative signs of a balanced, broad based and sustainable recovery”.

He will stress that it is still “early stages” and that “many risks” remain - perhaps mindful of the controversy attached to predecessor Norman Lamont’s 1991 “green shoots” speech.

And he will warn of the need to make “many billions” more in savings after the next election, cautioning Labour that “anyone who thinks those decisions can be ducked is not fit for Government”.

But he will insist that the last few months - which have seen growth forecasts revised upwards amid a number of positive indicators - had “decisively ended” questions about his deficit-reduction strategy.

The cost of living - to which Labour switched the focus of attacks on the Government - would have risen higher still if the coalition had not stuck to its austerity measures, he will say.

Treasury officials believe the economy has entered the “next phase” of recovery - only months after economists feared the UK was set to plunge into an unprecedented triple-dip recession.

Mr Osborne is expected to say: “The plan is working, but the recovery is still in its early stages, plenty of risks remain, and more years of hard decisions lie ahead.

“Our economy is turning a corner, but we must not take anything for granted.”

Labour accused the Chancellor of a “desperate attempt to rewrite history”.

“Three wasted years of flatlining under George Osborne have left ordinary families worse off and caused long-term damage to our economy,” shadow Treasury minister Chris Leslie said.

“This desperate attempt to rewrite history will not wash when on every test he set himself, this Chancellor’s plan A has badly failed - on living standards, growth and the deficit.”

Opposition leader Ed Miliband is expected to use his speech to the TUC conference to lambast the Chancellor for being “out of touch with ordinary families” by celebrating while they face the squeeze.

Mr Osborne has been buoyed by revised gross domestic product figures showing the UK economy grew by 0.7% in the second quarter of the year, with predictions it could reach 1% for the third quarter.

The respected OECD think-tank has almost doubled its prediction for UK growth this year to 1.5%.

Rising property prices and a summer retail splurge as well as booming car sales have also contributed to the feel-good factor, with surging manufacturing figures for June also helping fuel the improved mood.

Goods exports excluding oil plunged however by 9.3%, and the overall trade deficit more than doubled from £1.3 billion to £3.1 billion, with real terms wages also in decline.

The economy remains 3% below its pre-crisis level.

Addressing an audience of academics, think tanks and businesses, Mr Osborne will say that “the last few months have decisively ended” the idea that the scale and pace of his measures were to blame for much slower than projected growth over recent years.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer