Today's GDP results have been met with mixed reactions from both politicians and analysts. Official figures from the ONS showed that the UK economy grew by just 0.2 per cent in the second quarter of 2011. This is a slow down compared to the first quarter and also lower than predicted.
Chancellor George Osborne MP, maintained the latest results were positive news and showed that the "difficult decisions" taken by the coalition government had helped the British economy to continue to grow. Britain, he claimed, was a "safe haven in the storm" at a time when the world economy is looking increasingly unstable.
Other analysts, however, disagree. George Buckley of Deutsche Bank said in Reuters interviewthat, although the figures revealed a recovery of sorts, Britain is faring a lot worse than other countries.
Opinion is divided over whether coalition policy is responsible for the weak economic growth or whether special circumstances, such as the Royal Wedding, an extra bank holiday, and the Japanese tsunami, were to blame. Ian McCafferty, CBI Chief Economic Adviser, said that these special factors likely depressed economic activity over the short term and have made clear interpretation of the new data problematic.
Angela Eagle MP, Labour's shadow chief secretary to the Treasury, dismissed appeals to special circumstances as "excuses". Many other major world economies have faced similar challenges, she argued, and yet "their economic recoveries have continued while Britain has not grown at all over the last six months". She went on to suggest that the blame for the UK's weak growth lies with George Osborne's economic policies, which have "badly undermined the recovery in Britain ... leaving us badly exposed if things go wrong later in the year".
Several opponents of the Chancellor's policies have used the release of today's figures to push for a change of tactics. Will Straw, Associate Director of the Institute for Public Policy Research (IPPR), suggested in the Guardian yesterday that Osborne must begin to take measures to "kick-start" the economy. The Director of the Federation of Small Businesses, Andrew Cave, suggested that a "more aggressive agenda for growth" was necessary in order to increase Treasury revenues and business confidence.
The Public and Commercial Services Union (PCS) argued that low growth vindicated their consistent calls for the government to "stop the cuts and instead create employment in socially useful projects like transport, housing and the environment." PCS general secretary Mark Serwotka said: "The government should be creating jobs so people have money to spend. Instead of building confidence the government is spreading misery and anxiety and spending money on making people redundant rather than providing quality public services."