Letter: No knife-edge

David Blunkett
Thursday 13 August 1998 18:02 EDT
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Sir: Your front-page report "Economy on knife-edge" (later editions, 13 August) is inaccurate and completely contradicts your own earlier editions.

The last few days have been filled with ill-informed comment on the economy, which has swung from one extreme to the other. Yet the facts are that unemployment has continued to fall and we have seen a welcome reduction in earnings growth.

Balanced and rational discussion is helpful in increasing understanding of the global nature of economic pressures and the role we all have to play in ensuring a responsible approach to achieving future prosperity.

I did not say the "economy is on a knife edge", nor do I believe it to be so. On Channel 4 News on Wednesday I was discussing the manufacturing sector in Sheffield and the part which everyone can play in keeping inflationary pressures down to avoid the need for further interest rate rises.

Ministers understand the concerns of manufacturers, but what businesses fear most is a return to the "boom and bust" of the late 1980s and early 1990s when interest rates hit 15 per cent and a million manufacturing jobs were lost.

We are on course to achieve economic stability. As a result of the immediate and tough decisions this government has taken, and consistent with Budget forecasts, there is a necessary slowing of inflationary pressures so that the economy gets back on track to low inflation matched by steady and sustainable growth.

DAVID BLUNKETT

Secretary of State

Department for Education and Employment

London SW1

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