Britain in Europe’s slow lane says Balls as rivals see growth

Germany, Europe’s powerhouse economy, grew by 1.5 per cent after benefiting from the global recovery as emerging nations imported more machinery and cars while the French economy exceeded forecasts to grow by 1 per cent in the first quarter thanks to higher consumer spending and corporate investment. In the previous quarter it had grown at just 0.3 per cent.

French prime minister Francois Fillon said he was confident France would achieve its target of 2 per cent growth this year.

The UK’s economy, on the other hand, grew by just 0.5 per cent in the first quarter of 2011 following a decline of 0.5 per cent in the previous period, suggesting stagnation over the six months amid weak consumer confidence as wages fail to keep up with surging inflation and the Government makes swingeing cut-backs.

Mr Balls said since the Government’s spending cuts and VAT increases, Britain had fallen back into the “economic slow lane”.

“We’ve gone from the top end of the economic growth league table to being stuck at the bottom just above Greece and Portugal,” he said. “These figures show the huge risks George Osborne is taking in Britain by making a political choice to cut further and faster than any other major economy in the world.

“He doesn’t seem to understand that without strong growth and more people in jobs, paying taxes rather than claiming benefit, it’s harder to get the deficit down.”