Nick Ferrari embarrassed Ed Miliband this morning about his government’s goals after the Bank of England dampened Labour’s economic growth ambitions with a downbeat forecast.
The BoE downgraded its predictions of growth yesterday from 1.5% last year to 0.75% in 2025, and suggested the UK would only narrowly avoid the formal definition of a recession (two consecutive quarters of negative growth).
This was primarily due to the negative impact Rachel Reeves’ Budget will have on employment, after the chancellor chose to increase National Insurance contributions for employers.
The forecast came as a major blow to the government who have made growing the economy one of its central goals.
On LBC this morning, presenter Ferrari asked the energy and net zero secretary: “Why the failure?”
Miliband replied: “These figures go up and down, Nick, as you know.”
“They’re only going one way now,” Ferrari hit back.
The senior cabinet minister said: “It is worth pointing out that real wages are rising at their highest rate than they have done in three years. We know we’ve got further to go.
“What I’m doing in clean energy, or offshore wind or clean capture, driving forward the investment in our grid infrastructure, that is all about contributing to that growth figure.”
He added: “Obviously that is not easy, these figures go up and down, but we’re absolutely focused on it.”
Ferrari said: “The Bank of England doesn’t share your confidence though does it?
“How embarrassing is it, 10 days ago your colleague Rachel Reeves was talking about growth growth growth.
’But the reality is the financial headmaster comes along and says, ‘oh good luck, I’m cutting the growth!’”
But Miliband just said: “You and I have been at this a long time. What you judge a government on is what it does over five years. We are determined to fight for the British people, to make people better off.”
Reeves announced a series of new infrastructure projects last month, including a third Heathrow runway.
She said at the time: “Low growth is not our destiny. But growth will not come without a fight. Without a government willing to take the right decisions now to change our country’s course for the better.”
Responding to the Bank’s disappointing forecast yesterday, Reeves said she was “not satisfied” with those growth figures, adding: “Improving economic growth is at the heart of everything I am seeking to achieve.”