Bank of England report is "further blow" to Chancellor's credibility

George Osborne has described the Bank of England's latest quarterly inflation report as a "further blow to the credibility of the Chancellor and the honesty of the Budget."

The report predicts a "slow and protracted" economic recovery - and George stressed that this supports the Conservative position on Alistair Darling's Budget predictions.

"From the moment the Budget was announced, we Conservatives have questioned the Government's forecast that there will be a rapid return to boom time levels of growth."

George warned that the model of economic growth is "fundamentally broken" - and he stressed, "We cannot have a sustainable recovery until we have a Government that understands that."