OFFICIAL FIGURES have confirmed that Britain is in recession for the first time since 1991. British prime minister Gordon Brown vowed yesterday that his government would fight it with “every weapon at its disposal”.
A second quarterly drop in gross domestic output – down 1.5 per cent in the last three months of 2008 following a 0.6 per cent drop in the previous quarter – meets the generally accepted definition of recession. It has prompted renewed predictions that chancellor Alistair Darling will have to revise his November pre-budget prediction that the British economy will start to grow again before the end of next year.
In an interview yesterday on BBC Radio 4’s Today programme, Mr Brown declined to say how long he now thought the recession would last, repeating that its duration would depend crucially on the scale of international co-operation that could be achieved to tackle the global downturn.
The prime minister also insisted that whereas every previous recession in the past 60 years had been generated domestically and caused by inflation, “this is a completely different kind of event”.
The Liberal Democrats accused Mr Brown of being “in denial” about the causes of the recession.
The prime minister, however, dismissed as “ridiculous” a suggestion by Conservative leader David Cameron that Britain was “running the risk” of having to “revisit one of its darkest economic hours” under a previous Labour government and could be forced to borrow billions of pounds from the International Monetary Fund to keep the economy afloat.
Shadow chancellor George Osborne echoed Mr Cameron’s charge earlier this week that lack of confidence in Mr Brown would itself prove an obstacle to economic recovery.
With the latest opinion polls again giving the Conservatives a double-digit lead over Labour, Mr Osborne criticised an “endless” stream of government initiatives which, he claimed, were achieving nothing and renewed his criticism of the lack of detail in the latest bank “bail-out”.
“The Conservative Party have consistently warned that Gordon Brown failed to see the boom and to prepare for the bust,” Mr Osborne said.
Again pressed to admit he was wrong when chancellor to claim to have ended the cycle of “boom and bust”, Mr Brown’s conceded only that his government had failed to detect the developing crisis in the US subprime market.
“The problem was we had a complete market failure,” he said. “The markets actually seized up.”
