George Osborne in the dock as 'terrible' growth figures released
The calls for Osborne's head would be deafening if MPs weren't on holiday. But how long can this go on?
THE WORST growth figures in living memory, released this morning, have put George Osborne under pressure to change course - but David Cameron is showing no signs of changing his Chancellor.
UK growth shrank by 0.7 per cent between April and June, the Office for National Statistics said today. This is a much larger-than-expected fall and follows a 0.3 per cent drop in the first three months of the year.
ConservativeHome.com called the news "terrible” for Osborne. The calls for the Chancellor's head would be deafening today but for the fact that the Commons is not sitting and MPs are away on their long summer break.
Cameron is under pressure from his own MPs to swap Osborne with William Hague, a far more serious figure than the ex-Bullingdon Club posh boy, as many backbenchers on both sides of the House see him.
However, Osborne and Cameron are wedded together and switching Chancellors now would look like panic. The Mole hears from senior Tories that he is determined to hold onto Osborne as long as he can.
Osborne himself is still resisting dropping his austerity plan and switching to Plan B by spending more through more borrowing - a course pushed by the IMF only last week.
Instead, in his reaction to this morning's news, he again blamed Labour for the deficit he inherited, saying: "We all know the country has a deep-rooted economic problems. These disappointing figures confirm that..."
He sought refuge in the recent employment statistics showing that the number of new jobs has topped 800,000 - signs that the economy is doing better than the figures suggest – but also blamed the chaos in the eurozone for making it more difficult for the UK to export its goods to the Continent.
Even the Queen was unable to escape the blame game. The Office for National Statistics said there was a 'Diamond Jubilee effect', caused by the day off for the Queen's anniversary leading to a drop in output. The rain may also have been a factor.
The real worry for Cameron is that the figures show Osborne's Plan A - slashing public sector borrowing - now looks incapable of stimulating growth, and the double-dip recession – the worst since the 1920s - is showing no sign of abating.
Despite the quantitative easing (QE) pumped into the UK economy by the Bank of England, the patient has failed to wake up. Businessmen are complaining that the banks are still holding onto the cash and not passing it on in the form of business loans.
The Lib Dem half of the coalition cannot sit back and let Cameron and Osborne hit the rocks. You can bet by the time the MPs return in September there will be moves to provide some growth through public sector schemes, such as housing and transport programmes.
Chuka Umunna, the shadow business secretary pointed to this solution. He tweeted: "ONS construction figs for May 2012 show public housing
work falling by 22.9% and infrastructure by 21.3% - clearly attributable to the govt." ·