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Weak GDP growth of 0.2% in last quarter

THE UK economy grew by just 0.2% in the second quarter, according to figures released this morning.

The latest figure means the economy has largely been flat since September last year with GDP shrinking by 0.5% in the last quarter of 2010 and growing by the same figure in the first three months of 2011.

It will put Chancellor George Osborne under renewed pressure to defend the Coalition Government's plans for growth and the speed and extent of its cuts in public spending.

The weekend saw Business Secretary Vince Cable call for the Bank of England to expand its quantitative easing programme in an effort to stimulate greater demand.


Brian Sloan, head of business and economic policy at Greater Manchester Chamber of Commerce, said the figures were 'disappointing'.

"At 0.2% growth is anaemic, but can hardly be a surprise. From the moment the Government laid down its deficit reduction plans in last year’s Emergency Budget, we expected this was always going to be a challenging quarter with the VAT increase of Quarter One followed by further tax and benefit changes. We are in a low growth environment and will be for some time.

“Investment intentions are improving and the private sector is starting to create more jobs in the region, though some sectors and regions are performing better than others so the experience of the recovery will differ considerably.

"With exports providing much of the growth at present it is vital that we support businesses looking to export to new and emerging markets as the majority of these exports are reliant on the performance of countries will huge debt problems."

Ian McCafferty, CBI Chief Economic Adviser, said:“This is the third consecutive quarter in which special factors, such as the winter weather, unseasonal North Sea maintenance, the Japanese tsunami and an extra bank holiday, have made interpretation of the data more difficult and have depressed economic activity over the short term.

"There is likely to be some bounce back over the autumn, but it’s clear that the underlying economic recovery remains fragile and difficult."

Source : Chris Barry - The Business Desk.com
www.thebusinessdesk.com/northwest/news/197818-weak-growth-of-0.2-in-last-quarter.html#

26 July 2011
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