AS THE latest data suggested the economy shrank in July, Chancellor John Healey declared that growth must extend beyond Britain’s largest cities.

Local authorities and town centres are to receive more support, Mr Healey said ahead of a pre-Budget speech today.

“Not growth for its own sake, not a number on a spreadsheet. And not reserved for our biggest cities. This is about growth in every postcode,” he wrote in the Sunday People. “Factories across Britain taking on young people. Small business owners finally being able to expand. Town centres and high streets seeing new life.

“Britain already has the strengths it needs to succeed — global financial centres, cutting-edge science and technology, world-class universities and communities full of ambition. So the question is: What’s stopping us?” he said.

The Chancellor is expected to outline plans for long-term development across the country on October 28.

He said that his Budget would deliver growth by putting “mayors, local government, entrepreneurs and investors at the heart of this plan.”

His speech follows warnings from economists that the economy shrunk slightly in July due to weak retail sales and increased energy costs on households due to the US war on Iran.

Experts at Investec and Pantheon Macroeconomics predicted that the Office for National Statistics will reveal GDP fell by 0.1 per cent for the month when it issues the latest growth data on September 11.

Mr Healey told the FT on Sunday that the Iran war was “hitting inflation, it’s hitting growth, it’s hitting borrowing costs.

“It’s part of a more dangerous world that is more uncertain and it’s one of the challenges we have to meet in this country, but have to meet with other [countries],” he said.