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”.
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