Autumn Statement 2011: 'Osbourne Right to Stick to Plan A'

The Chancellor, George Osborne, is right to "stick to plan A" according to the Centre of Economic and Business Research (Cebr).

Speaking to the IBTimes, low consumer spending, a eurozone heading for recession and a huge national deficit has left the chancellor with "a horrible hand to play", according to managing economist at Cebr, Charles Davis.

"No one could have predicted what has happened in the eurozone and consumer spending, which drives 60 per cent of the national GDP, has totally flatlined," he said.

Osborne, who is making the autumn statement to the Commons this afternoon before taking a train to Brussels to meet with other EU finance leaders, is set to announce a number of pro-growth measures in another attempt to artificially boost the economy with taxpayers' money.

With emphasis places on the UK's export market to the eurozone in the last budget, a strategy seriously hit due to the debt crisis within Europe, the chancellor is turning his attention towards domestic infrastructure and the National Loan Scheme that will lend money to business at a cheaper rate than what the banks are currently offering.

Although a total of £25 billion will be invested, Davis suggests that the results won't be seen for a long time.

"It will be difficult to see an instant effect," he said. "Remember fundamentally that this is taxpayers' money and the main way to stimulate growth is for private companies to make investments. But market conditions simply won't allow that."

"Mr Osborne is likely to take a lot of stick in the Commons today, but really Ed Balls [the shadow chancellor] doesn't have any alternative policy," said Davis. "The chancellor must stick to Plan A."