UK economic growth slowed to 0.2% in the second quarter of 2011, prompting renewed calls for the government to revise its deficit reduction plan.
The Office for National Statistics published figures today showing Gross Domestic Product grew by 0.2% between April and June. This follows growth of 0.5% in the previous quarter.
The ONS attributed the slowed figures to a number of one-off events during the last three months. The figures are automatically adjusted for recurring calendar events such as Easter but not for one-off occurrences such as the Royal Wedding bank holiday. The after-effects of the Japanese tsunami hit manufacturing and the sale of the first phase of London 2012 Olympic tickets, which will not be recorded in GDP estimates until the third quarter of next year, also had a negative impact.
Record warm weather in April had a mixed effect on the economy – boosting spending on hotels and restaurants but reducing spending on domestic fuel, according to the ONS.
Chancellor George Osborne said it was ‘positive news’ that the British economy was continuing to grow and create jobs. ‘And it’s positive news too that at a time of real international instability we are a safe haven in the storm,’ he added.
But unions immediately called on the government to revise its spending cuts programme.
Mark Serwotka, general secretary of the Public and Commercial Services union, said: ‘Today's figures show that there has to be an alternative to the atmosphere of recession and gloom.
‘The government must end the pay freeze, stop job cuts and invest in services - then people will be spending money and paying taxes.’
Unite general secretary Len McCluskey renewed his union’s call for a Plan B. He said: ‘With every passing month, it is becoming clearer and clearer that the government’s monetarist and fiscal policies are not delivering the level of growth necessary for the British economy to recover.’
Other
commentators also warned that Osborne’s economic strategy wasn’t working. Andrew Sissons, researcher at the Work
Foundation, said the recovery was ‘struggling to gain momentum’.
He added: ‘The lack of growth in the economy reiterates the need for government to put in place a more ambitious and credible long-term plan for growth. This plan must be focused on supporting innovation and investment in Britain, rather than cutting corporation taxes and hoping for the best.’
