Balls doubts Bank backs Osborne

Shadow chancellor Ed Balls has questioned whether the Bank of England supports the coalition's "crushing" austerity measures as the economy stalls.

Mr Balls said yesterday he believed the Governor, Mervyn King, harboured serious concerns in his "heart of hearts" but was unable to voice them publicly.

He also accused the government of being in "denial" over signs that the UK recovery could be running out of steam.

But Chancellor George Osborne dismissed calls for a "Plan B", insisting there would be "financial turmoil" if he retreated from efforts to tackle the deficit.

"If, on Monday, I got up in the dispatch box in the House of Commons and said: 'I am abandoning the deficit reduction plan that Britain set out last year', what do you think the reaction would be?" he told the BBC's Politics Show.

"Within minutes Britain would be in financial turmoil," he added. "I am not prepared to let that happen. It requires tough, difficult decisions.

"No politician likes cutting spending and increasing people's taxes, but I was delivered a mess by the previous government and I am trying to clear it up."