Worst recession in 50 years

The Business Secretary Vince Cable has said that he would "probably" be a good chancellor but stressed that he was not calling for a change in personnel.

He was responding to an earlier call by the Liberal Democrat peer Lord Oakeshott who said he should replace George Osborne, who he back-handedly praised for "doing well as a chancellor on work experience”.

Asked on BBC2's Newsnight whether he would make a good chancellor, he said: "I probably would, but George Osborne is doing the job, we're doing it together, well, as part of a team, and nobody's suggesting we change the arrangements."

The Liberal Democrat Chief Secretary to the Treasury Danny Alexander has said that today's GDP figures were "very disappointing". He also said the Coalition was not all about austerity, citing tax cuts for 24 million people and businesses.

Professor David Blanchflower, a former member of the Bank of England's monetary policy committee and a critic of the Government's austerity policy, has described today's GDP figures as "disastrous".

He told the BBC News Channel that the Government's austerity programme is "nonsense" and that its recent initiatives to stimulate growth will take three years to kick in.

He called on the Government to "give firms incentives to hire and invest today...because otherwise the economy will carry on downwards".

Former Liberal Democrat Treasury spokesman Lord Oakeshott has called for a "new A team at the Treasury" after today's "dismal" GDP figures.

Turner and Townsend chief executive Vincent Clancy told ITV News that infrastructure spending is "key" for the construction industry which saw output drop by 5.2% in figures released today.

Business Secretary Vince Cable said on today's GDP figures: "Clearly we are dealing with news today which is disappointing and it underlines the very difficult economic conditions under which we are operating."

He also distanced himself from comments by Liberal Democrat ally Lord Oakeshott, saying: "We have a very good team in the Government and the Treasury and I work very harmoniously with them."

Labour leader Ed Miliband said the government's economic plan has "failed" after figures released today showed GDP shrank by 0.7% between April and June.

Shadow Chancellor Ed Balls said: “These shocking figures speak for themselves. As we warned two years ago, David Cameron and George Osborne’s ill-judged plan has turned Britain’s recovery into a flatlining economy and now a deep and deepening recession.

“And with Britain just one of two G20 countries in a double-dip recession and borrowing now going up as a result, it is clear that this Government’s plan has failed. If these figures don’t make the Chancellor wake up and change course, then I don’t know what will.

“Thank goodness the Olympics will give our economy a much-needed shot in the arm. But this short-term boost is not enough – we need a plan B now to get the economy moving again and radical reforms to set Britain on a new course for jobs, growth and long-term prosperity.

"The longer the Chancellor refuses to act, the heavier the price our country will pay.”