STUC on UK GDP figures

August 28th 2009

Commenting on the revisions to the UK GDP figures for the second quarter of 2009 which show that the economy contracted by 0.7% and not 0.8%, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:

“Today’s revisions show only a very slight improvement on the previous estimate and it should be remembered that many commentators had predicted a resumption of growth in the second quarter.

“Although a return to growth in the third quarter is entirely possible, the STUC believes that a robust, sustainable recovery remains a distant prospect. Bank lending to businesses is unchanged on a year ago and the Bank of England is clearly worried about deflation. The potential impact of deflation in a highly leveraged economy like the UK is frightening to contemplate.

“Despite irresponsible political rhetoric about a looming public debt crisis, investors continue to enthusiastically fund UK debt. As unemployment continues to rise at a rapid rate, the Government must start to consider introducing further stimulatory measures through the 2009 Pre-Budget Report. At the very least, it must dispense with plans to cut public spending next year”.

ENDS

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