In advance of the Spending Review and on publication of the Bank of England’s Agents’ summary of business conditions for October 2010 and Scottish GDP statistics for Q2 2010, Grahame Smith, STUC General Secretary said:
“Today’s economic news provides no comfort for the Chancellor as he prepares to announce his Spending Review.
“The Bank of England’s Agents have confirmed that both consumer demand and business investment remain weak. Scottish GDP statistics confirmed negative growth in Q1 2010 but strong growth in Q2 2010. Unfortunately for the Chancellor the revisions to the Q2 data for the UK have shown that government spending and consumption fuelled by savings contributed more to this growth than originally estimated. Neither will be sustained over the coming months as spending cuts are introduced and households increase their savings.
“Most worryingly for the Chancellor, is the Bank’s Agents’ finding that the ‘private sector remains very cautious about expanding the labour force’. And yet today he will no doubt make the absurd claim that the private sector is well placed to create sufficient employment to more than replace the 500,000 jobs to be destroyed in the public sector. This is ideologically driven nonsense and will be recognised as such by those thrown on the unemployment scrapheap by the coalition’s policies.”
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