BRITISH CHANCELLOR of the exchequer George Osborne has come under renewed pressure to boost the economy following depressing economic figures that showed manufacturing has fallen to a two-year low.
Meanwhile, house prices outside of London have fallen significantly and the British Chambers of Commerce warned Britain will not meet even the anaemic growth targets set down by Mr Osborne.
Labour leader Ed Miliband was one of a number to urge Mr Osborne to abandon, or slow down, the impact of £180 billion spending cuts over the next four years.
The Labour leader insisted the world now “needs a global Plan B”.
The latest manufacturing statistics show that confidence amongst British firms is at a 26-month low while output, which recovered significantly after the 2008 recession, is now falling back once again.
Most significantly, the number of new orders from European and US clients, which had been rising substantially up to late last year and which had led to optimism that Britain could trade its way out of its present difficulties, fell at the sharpest rate for over two years.
Offering a litany of bad news, the British Chambers of Commerce said it believed unemployment will rise to 2.6 million by the end of next year, while the public will remain slow to spend.
The challenges facing Britain are now “more difficult” than had been originally believed, said the chamber’s director-general David Frost, who forecast slow growth, along with high inflation: the so-called “stagflation” syndrome.
The chamber’s chief economist, David Kerns, said Britain will not return to its pre-recession levels until 2013, while consumer spending will take a year longer to get back to where it was in 2008.
“Future growth will be constrained by the consequences of the credit bubble and the banking crisis,” he said.
In its latest review of UK property prices, Nationwide Building Society found they had fallen by 0.6 per cent from last month and now stood 0.4 per cent on average down on where they were a year ago – though prices in the northeast are down 9 per cent.
