Deficit Denier: Larry Elliott, Economics Editor, the Guardian
“Britain's growth spurt in the spring of this spring also owed a great deal to the last government's attempts to stimulate demand through public sector infrastructure programmes, job placement subsidies, the VAT holiday, cash for clunkers and active policies to prevent businesses going bust and to prevent homes being repossessed. Some of those programmes came to their scheduled end, others have been canned by the incoming coalition government.
“George Osborne has, however, given an added twist to the downward spiral, both by taking money out of the economy this year and by his blood-curdling warnings that cuts of at least 25% in Whitehall spending will have to be announced in next month's comprehensive spending review in order to tackle Britain's deficit. Unsurprisingly, that has affected the investment decisions of companies and is likely to have a progressively bigger effect on consumer confidence as the cuts actually materialise.
“All in all, the current state of the economy supports what Gordon Brown was saying during the election: namely that the Conservative plan to begin deficit reduction immediately was highly dangerous. The question for the chancellor is whether he is prepared to concede this point, before it is too late."