Hopes of economic recovery take double blow as GDP remains at 0.7%
Thursday 26 September 2013
Hopes of a broad-based recovery for the UK were dealt a blow today as official figures showed trade flat-lining and business spending falling steeply between April and June.
The Office for National Statistics left overall growth unrevised at 0.7% for the second quarter of the year, but the detail showed a bigger-than-expected 2.7% slide in business investment spending dragging down the economy. Net trade made no contribution to growth, but consumer spending rose 0.3%.
Lee Hopley, chief economist at manufacturers’ organisation the EEF, said the fall in business investment “again highlights the rebalancing challenge” for the UK economy. “But if confidence is beginning to return, we should expect business investment to follow,” she added.
Chancellor George Osborne hailed “tentative signs of a balanced, broad-based and sustainable recovery” earlier this month although many experts disagreed. The economy is expected to accelerate to a pace of around 1% in the current quarter following upbeat survey data but Rob Wood, chief economist at investment bank Berenberg, said: “The UK has not yet reached the nirvana of a broad-based recovery and there will be bumps on the road.”
Inventories also made a bigger contribution to growth than first thought, boding less well for growth in future quarters as firms eat into stockpiles rather than producing more goods.
Vicky Redwood, chief UK economist at Capital Economics, said: “The breakdown now looks a bit less favourable than before... there are clearly still reasons to be cautious about assuming that the recovery can maintain its recent impressive pace.”
Disposable household income grew 1.5% against the first three months of the year — but this was largely put down to bonus payments being paid in April not March to take advantage of the Chancellor’s cut in the highest rate of income tax. The share of income put aside by households improved to 5.9% from 4.4%
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 3 Oil tanker with $100 million cargo goes missing off Texas coast
- 4 George Galloway attacked on Notting Hill street by man 'shouting about the holocaust'
- 5 Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Oil tanker with $100 million cargo goes missing off Texas coast
George Galloway attacked on Notting Hill street by man 'shouting about the holocaust'
Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- < Previous
- Next >
iJobs Money & Business
£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...
£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...