'There'll be no triple dip recession': Danny Alexander dismisses dire warnings made by economic expertsChief Secretary to the Treasury predicted steady growth would returnDanny Alexander was positive despite predictions of a third recession
10:26 GMT, 10 December 2012
The Chancellor’s second in command yesterday dismissed fears that Britain was heading for a triple dip recession, despite dire warnings from economic experts.
Danny Alexander, Chief Secretary to the Treasury, predicted ‘steady growth’ would slowly return next year and the year after.
Last week the economy was predicted to shrink for a third time since 2008 in the last three months of this year by the Office for Budget Responsibility.
Positive outlook: Danny Alexander spoke of a brighter future for Britain on BBC1's The Andrew Marr Show yesterday, predicting steady grown and no return of recession
Figures released at the end of last week also revealed that industrial output, which was tipped to rise, was at its lowest for 20 years.
Mr Alexander said yesterday he accepted the analysis, but claimed the negative growth this quarter would be small and not continue over two quarters and classify as a recession.
Asked about the prospects for a triple-dip recession he told the BBC’s Andrew Marr programme the forecasts ‘would suggest that we’re not going to have that’.
But he predicted there would be a dip following the return to growth between July and September this year, ‘a sort of bounce back if you like from the Olympic boost’.
Saver: Danny Alexander, pictured leaving the Treasury with George Osborne to deliver the Autumn Statement last week, wants to save 10 billion before the next election without cutting into schools or the NHS
Acknowledging the uncertainty posed by continuing problems in the eurozone and the banking system, he predicted ‘a small negative’ in the final quarter of this year, but then ‘steady growth slowly starting to return next year and into the year after that’.
Market hopes that October would see a rise in industrial production were dashed by the Office for National Statistics which revealed it had fallen by 0.8 per cent, partly due to a major fall in North Sea gas and oil output.
The OBR this week slashed growth forecasts for the next five years and predicted a borrowing bill some 84billion higher than its last estimate following Chancellor George Osborne’s announcement that austerity measures would have to continue until 2018.
It also predicted the economy would shrink by 0.1 per cent in October to December.
Mr Alexander promised to protect the NHS and school budgets as he looks to save an additional 10bn before the next election.