20130725 – London
Chancellor claims ‘Britain is on the mend’ after UK GDP growth of 0.6%
Figures released today show that the UK economy grew by 0.6 percent in the 3 months to June this year. The Chancellor, George Osborne, welcomed today’s news, declaring “the British economy is on the mend”.
All sectors of the economy saw growth between April and June, according to the Office for National Statistics. Both industrial production and the key services sector expanded by 0.6 percent, the ONS said. The construction industry, which has long been a drag on UK growth, picked up by a healthier than expected 0.9 percent.
The 0.6 percent growth for the second quarter of 2013 is exactly as economists predicted, and is a strong sign that the economic recovery is gaining momentum. However, despite the modest signs of recovery, the economy has still not recovered the output that was lost during the deep recession of 2008-09, with GDP remaining 3.3 percent below its pre-crisis peak.
Although growth has been positive, the areas of growth remain worrying – exports have not grown substantially, despite the weak pound, and unsustainable consumer spending, at a time when debt repayments remain structurally important, remains a large source of economic growth. Until Britain can start exporting more, economic growth will remain sluggish.
Ed Balls, the shadow chancellor, said “After three damaging years of flat-lining, this growth is both welcome and long overdue. But families on middle and low incomes are still not seeing any recovery in their living standards”.
