Wed 3rd Jul 2013
26.08.11: Weak GDP figures confirm need to boost economic growth
• GDP in Q2 up 0.2% on the quarter, 0.7% on the year
• Manufacturing fell 0.5% on the quarter but rose 2.0% on the year
• Services rose 0.5% on the quarter,1.2% on the year
Commenting on the revised GDP figures for the second quarter of 2011, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“These figures were broadly as expected, confirming that the economy grew at a slow pace of 0.2 percent in the second quarter of the year. While special factors, such as the Royal Wedding, partly account for the weak growth, the overall pace of expansion in the economy is disappointing. The decline in manufacturing in the quarter is a concern, with an initial estimate of 0.3 percent which has been revised to a larger decline of 0.5 percent.
“There are difficult times ahead for the UK economy but there is no need for undue pessimism. Economic growth remains in positive territory and other nations face the same challenges. For example, Germany grew by only 0.1 percent in the second quarter while the French economy was stagnant.
“Based on these figures, we believe that the government must persevere with its deficit-cutting plan aimed at stabilising our public finances. But we mustn’t be complacent and every effort must be made to avoid an economic setback. The Bank of England should maintain low interest rates for an extended period and consider increasing the QE programme if there are further signs of weakness. On its part, the government should explore more policies to help boost growth, such as reducing regulatory burdens which prevent businesses from creating jobs and wealth.”