George Osborne firm on austerity as UK growth contracts Former Bank of England rate setter Danny Blanchflower said: "Osborne said the economy is 'heading in the right direction' not clear why he thinks economic decline is a good idea?" Damian McBride, Gordon Brown's former aide, tweeted: "What on God's Green Earth was Osborne doing eating pizza in Davos when he knew GDP was back in negative territory?" David Cameron and Mr Osborne were reported to be in high spirits over dinner at a pizza restaurant in Davos last night just hours before figures showed the economy is slipping back towards recession. Earlier a Treasury spokesman said: ""The official forecast was that the UK economy would contract in the last quarter of 2012 so this figure is not unexpected.