Britain is in its longest double-dip recession for more than 50 years, according to official figures expected today which will increase the pressure on George Osborne to adopt a "Plan B".
Analysts believe gross domestic product (GDP) shrunk by about 0.2 per cent between April and June, its third consecutive three-month period of contraction. That would be the longest double-dip recession since quarterly records began in 1955 and is believed to be the worst since the Second World War. The last, in the 1970s, lasted only two quarters.
Defending the figures, the Chancellor is expected to point to Britain's low borrowing costs and to argue that the eurozone crisis is harming growth prospects in the UK.
Yesterday, Ed Miliband claimed the "tide is turning" in Europe against "austerity and unemployment and towards jobs and growth". He was speaking in Paris after being given the red carpet treatment by François Hollande, the new Socialist President of France. He overruled his officials to break with protocol by welcoming the Labour leader on the steps of the Elysée Palace, an honour normally reserved for heads of government.
Mr Miliband, the first senior British politician to visit the Palace since Mr Hollande's election in May, said the two men agreed that a new approach was needed, especially to tackle youth unemployment. "What President Hollande is seeking to do in France and what he is seeking to do in leading the debate in Europe is find that different way forward," he said.Reuse content