Economy grinds to a halt

3:36am Saturday 23rd August 2008

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Labour's economic record was under fire after UK growth ground to a halt between April and June in the worst performance for 16 years.

Official data showed the UK economy stagnated in the second quarter of 2008 - worse than the modest 0.2% growth first estimated, and heightening recession fears.

The gloomy landmark ends a run of 63 consecutive quarters of growth and shatters the Government's boasts of continuous economic advance since taking power in 1997.

It also puts further pressure on the Government to deliver with an economic rescue plan following the summer recess.

Shadow chancellor George Osborne said Gordon Brown's "bubble had burst".

"Millions of people are paying an unfair price for Labour's economic incompetence and the fact the Prime Minister didn't put money aside during the good times to prepare for a rainy day," he said.

Liberal Democrat treasury spokesman Vince Cable added: "We're now seeing the full extent of the self-delusion which led ministers to believe that everything was well with the British economy."

A Treasury spokesman blamed the figures on global factors such as surging oil prices and the credit crisis.

He said: "The UK, like other economies, is seeing the consequences of globally high commodity prices, as well as the uncertainty in the credit markets.

"The Government's priority is to guide Britain through these challenging times, while also supporting those hit hardest as a result of these global factors."