Who is telling the truth – Brown or Darling?

For many months now both consumers and industries have been concerned about the slowdown that has hit the UK’s economy. With the nation hitting a period of stagflation, which is a toxic combination of stagnant economic growth and soaring inflation levels, it seems that the nation has been thrown into chaos. Even the Monetary Policy Committee and the Bank of England have been at loggerheads over recent months with regards to the movement of the base rate, with some wanting to increase the rate to curb inflation and others wanting to cut the rate to boost the economy.

Throughout this chaos the Prime Minister Gordon Brown has been trying to reassure the nation that whilst the country is facing difficulties, as are other nations across the globe, the government is taking steps to ensure that Britain gets through the turbulence as smoothly as possible. This is despite concerns that have been expressed by various industry groups such as the British Chambers of Commerce that the country is set to slide into recession within the coming months. Even the governor of the Bank of England, Mervyn King, has not ruled out the risk of recession, as he indicated in a recent speech.

However, recently opposition party officials have been given the ammunition they need to suggest that not only is there a split amongst senior officials of the Labour party but that there could even be a challenge for leadership of the party. This is because the Chancellor of the Exchequer, Alistair Darling, recently gave a very frank interview to a national newspaper admitting that the UK economy was facing the worst crisis in sixty years, which opposition party officials claim flies in the face of everything that Gordon Brown has been saying.

In his interview Darling said that he felt he had a duty to be honest and open with the people of Britain, and he added that the economic downturn would be longer and more difficult than most had feared.

Interestingly, this is something that a number of industry groups such as the CBI and the BCC have been saying for some time. Darling even said that voters had become ‘pissed off’ with the way that the government had handled the economic crisis, adding that Labour had clearly failed to get its message across with regards to understanding people’s fears and concerns over the economic situation.

In his interview Darling stated: “I think it is important that government ministers and particularly me as Chancellor level with people. I explained that what is happening to every country in the world, ours included, is that we have a credit crunch the like of which we have not seen for generations. We have that at the same time as oil and food prices going up. But I also am clear that the fundamentals of our economy are strong.”

Tags: crisis, United Kingdom, economics, Labour Party, Alistair Darling, Labour, gordon brown, nation