ITEM CLUB FORECAST REPORT BAD NEWS FOR CHANCELLOR - CABLE

12.01.00am BST (GMT +0100) Mon 24th Jul 2006

Responding to the ITEM Club's summer forecast, which is released today, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "This report will not be welcome summer reading for the Chancellor. It highlights the weakness of household budgets, and with rising utility bills and unemployment, and a likely increase in interest rates at the end of the year, the situation is only going to get worse.

"The Chancellor appears now to be losing control of the public finances and is likely to face huge difficulty in bringing public spending under control over the next few years.

"With the Treasury in such a mess on VAT fraud, it is difficult to read too much into the export data and even more difficult to take anything positive from it.

"The Chancellor is now increasingly dependent on a thriving global economy as the domestic economy continues to under perform."