Ed Balls MP, Labour’s shadow chancellor, responding to the Bank of England’s quarterly inflation report, said:
“By recognising the importance of policy action to support jobs and growth, at last we are seeing the Governor show the leadership we have failed to see over the last three years and are still not seeing from the Chancellor. Mark Carney is right to warn that the recovery is weak. It is the slowest on record and families are facing a growing cost of living crisis.
“But the new Governor is not a miracle worker and monetary policy cannot do the job alone. As we and the IMF have consistently said George Osborne must finally act to support the economy and also help families feeling the squeeze.
“This new approach will require careful vigilance from the Bank of England. Given the high inflation we have seen over the last couple of years it will be very important that the MPC stays vigilant to inflationary risks. But of course the reason why the Bank is having to take this new approach is because, as their report says, government policy has ‘weighed on output growth over the past three years and will continue to do so’.
“Despite George Osborne’s out of touch claims, working people are worse off after three years of flatlining. So instead of more complacency from the Chancellor, we need action to catch up all the lost ground of the last three years and help families feeling the squeeze. Labour would act now including with a 10p starting rate of tax, a compulsory jobs guarantee for the long-term unemployed and by bringing forward long-term infrastructure investment.
“This is kind of leadership the Bank of England and the country need from the Treasury, not more complacency and inaction from a Chancellor whose plan has failed so badly over the last three years.”