Brown admits he got it wrong

5.00.00pm GMT Mon 5th Dec 2005

Gordon Brown [© Crown Copyright 2005]

Gordon Brown has today admitted to MPs that the economic forecasts he made just nine months ago were hopelessly optimistic. Mr Brown, who has built his reputation on the prudent stewardship of the economy, is likely to say the economy will grow at 1.75% this year, its slowest pace in more than a decade and only half of what he forecast in the March budget.

Vincent Cable MP, Liberal Democrat Shadow Chancellor said "The Chancellor's reliance on spin and exaggeration means a respectable economic growth performance looks like a failure. As the Chancellor well knows the origins of this slowdown are domestic, not foreign and oil based as he often claims. Debt servicing as a share of income is now very close to the peak of 20%. Business investment growth is under half the Treasury estimate, manufacturing output is declining, and R&D funding has fallen despite the £1 billion a year of taxpayers' money the Chancellor has thrown at it."