PRESSURE is mounting on George Osborne to perform yet another U-turn and kick-start Britain's ailing economy as the country braces itself for more gloomy economic evidence that it is mired in recession.
Amid a growing whispering campaign for the Chancellor to be replaced by Foreign Secretary William Hague – and a poll yesterday that showed 44% of voters say he should be ousted – Mr Osborne is expected to learn on Wednesday the Gross Domestic Product (GDP) has been stagnant for well over a year.
Today, the Institute for Public Policy Research (IPPR) will pile further pressure on the Chancellor by claiming his plans to boost confidence and encourage investment are having the opposite effect by deterring businesses and consumers from spending.
In a report, the left-leaning think-tank says the sluggish recovery from recession will see the UK's long-term GDP growth rate drop to just 1.7% by 2015 – its lowest level since the Second World War and the equivalent of £165 billion in lost output over 15 years.
It calls not only for additional infrastructure spending but also temporary tax cuts and further quantitative easing to boost demand and bolster anaemic investment from the private sector.
With Scotland entering its own double-dip downturn last week and the International Monetary Fund yet again downgrading Britain's growth to a meagre 0.2% growth for 2012, Alex Salmond has written to the Chancellor calling for emergency action.
The First Minister told him: "This week's GDP and labour-market statistics clearly highlight the urgent need for a stimulus of capital investment to boost not just the construction sector, but also the wider economy.
"What we need urgently is a direct injection of UK Government capital spending into shovel-ready projects allocated across sectors such as renewables, tourism, transport and housing.
"A modest investment of an additional £5bn at the UK level would provide a much-needed boost to the economy and help ensure both Scotland and the UK return to growth."
Mr Salmond added: "We have identified a range of new projects in Scotland that could start immediately and can guarantee the additional £400 million-plus in consequentials from such a package would be spent during the current financial year. Such a move would provide an immediate boost to the economy, and help kick-start wider private-sector investment."
In the unlikeliest of political alliances, the Conservative London Mayor Boris Johnson also called on Mr Osborne to start pouring money into infrastructure projects.
He said: "I'd like to see a bit more supply-side stuff. I'm sure the Government would love to do it, to get on with allowing businesses to take on staff more easily. I would like to see a very aggressive campaign for more investment in infrastructure."
The Mayor's remarks will be seen as a rebuke to the Chancellor, who some see as his future rival for the Tory crown whenever David Cameron decides to step down as Conservative leader.
Yesterday, a poll showed 44% of voters, including 22% of Tory supporters, believe Mr Osborne is not up to the job and should be removed.
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