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Professor Gary Cook is Head of Economics, Finance and Accounting at the University of Liverpool’s Management School.
“The latest figures for economic growth showed that the economy grew by 0.3% over the first three months of 2013.
“The figures were eagerly awaited after the economy shrank in the final three months of 2012 – another fall in output would have signalled that the economy had once more moved into recession, for what would have been the third time since the start of the financial crisis.
Back on track?
“The Chancellor, relieved, lost no time in claiming that his economic policy was working and on track…..but to what extent is that true?
“Growth continues to be very weak and weaker than when the Chancellor set out his plans to balance the books on the government budget.
“It is also the case that the UK economy remains 2.6% smaller than when the financial crisis bit in 2008 and very far below where it might have been had economic growth remained on its usual trend.
“What other clues were there about the outlook for the UK in these growth figures?
“Construction activity, often a leading indicator for the economy, shrank by 2.5% and is still 18% below where it was at the start of the crisis.
“A disproportionate amount of the governments cuts in public expenditure will fall on the capital budget, so there will only be more pain for the construction sector from that quarter. On the other hand, retail, leisure and restaurant expenditure had reasonably positive growth, which signals some increase in consumer confidence, as belt-tightening generally affects these sectors disproportionately.
“All that said, many households are continuing to struggle as the real value of their take-home pay falls or is at best stagnant.
“The outlook, then, is for weak growth and tough times ahead for some time to come……..but, it could have been worse, at least we have not gone into the triple-dip recession.”
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