Commenting on publication of preliminary estimates for UK GDP growth in Q1 2011 which showed growth of 0.5%, Grahame Smith, STUC General Secretary said:
“Confirming no underlying growth in the UK economy over the last six months under report, today’s figures are unequivocally bad news. It is essential to emphasise that these figures reflect the state of the economy before the coalition’s spending cuts really started to bite in April 2011.
“The pre-announcement media coverage has tended to suggest that any return to growth represents good news. This is a narrow, unhelpful assessment of a key indicator of the current state of the economy.
“Given that December’s bad weather was estimated to account for the 0.5% decline in Q4 2010, the least that could have expected was for this to bounce back in Q1. The Financial Times was correct to argue yesterday that growth of 1.2% was required to confirm that the economy was growing at an average pace in Q1. Indeed, the FT argued that growth of 1.7% was necessary to account for the underlying stagnation in Q4 being reversed.
“The STUC has never argued that the Coalition’s economic policies would necessarily cause the economy to meet the technical definition of a double dip recession. But we have argued that avoidable, unfair and regressive spending cuts would cause unemployment to remain much higher for much longer than was necessary. Today’s preliminary estimates strongly suggest that we were correct in this analysis. In these circumstances the STUC is baffled and appalled that the Chancellor is prepared to argue that the ‘economy is roughly in the right place’.”
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Stephen Boyd 0141 337 8100