Alarming IMF report shows austerity is failing and causing permanent economic damage

date: 19 July 2012

embargo: For immediate release

Commenting on the IMF country report on the UK published today (Thursday), TUC General Secretary Brendan Barber said:

'Today's alarming health check on the UK economy from the Chancellor's favourite economic experts makes it clear that plan A is not working.

'The recovery has ground to a halt, the government is set to miss its deficit target and austerity has shrunk the size of the economy by £37.5bn over the last two years.

'Continuing along this path could cause permanent damage to the economy. Even the Prime Minister has hinted Britain could face perpetual cuts.

'The government must call time on self-defeating austerity and stimulate demand to get the economy growing again. Yesterday's plan to encourage investment in infrastructure may stem some of the damage caused by the government's strategy but it won't secure the recovery, especially as the government is slashing its own investment spending.

'The country needs a far more ambitious plan that invests in people and supports industries, rather than one that sucks the life out of the economy.'

NOTES TO EDITORS:

- The full report is available at www.imf.org/external/pubs/ft/scr/2012/cr12190.pdf

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

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