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UK Economy Records Minimal Growth For Second Quarter, Figures Show

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The UK economy grew by 0.2 per cent for the second quarter for 2011, the Office for National Statistics (ONS) has said.

Announcing the figures on Tuesday, Joe Grice, ONS Chief Economist and Director, said the economy had been "flattish" over the last six months, following growth of 0.5 per cent in the first quarter and a contraction on 0.5 per cent in the last three months of 2010.

Grice said while the service sector and construction sector grew by 0.5 per cent in the three months up until June, the production sector fell by 1.4 per cent. The largest contribution to the decline was from mining and quarrying, the ONS said, and a shortfall of gas and electricity output.

Manufacturing fell by 0.3 per cent, compared with an increase of 0.7 per cent in the previous quarter.

The ONS chief said a number of factors hit the economy in the second quarter, including the Royal wedding in April, the public holiday that followed, the after-effects of the Japanese tsunami, and the warm weather in April.

"Our analysis suggests that they might have done to the effect of something of perhaps of the order of 0.5 per cent of GDP but that's an uncertain estimate."

Chancellor George Osborne said the figures showed Britain was "a safe haven in the storm".

"The positive news is that the British economy is continuing to grow and is creating jobs," he said.

"Our economy is stable at this time because this government has taken the difficult decisions to get to grips with Britain's debts. Abandoning that now, as some argue we should, would only risk British jobs and growth."

However, Osborne's response was criticised as "breathtakingly complacent" by Ed Balls, the shadow Chancellor. Balls called the latest figures "very bad news for jobs, living standards, business investment and for getting the deficit down."

"These figures show that last year's recovery has been recklessly choked off by George Osborne's VAT rise and spending review."

"The cautious thing to do is to change course before it is too late, not to plough on with a reckless gamble which doesn't seem to be working. The Chancellor should start listening not just to me, but the IMF and the Federation of Small Businesses who have also called for temporary tax cuts if slow growth persists."

The Public and Commercial Services Union (PCS) also criticised the government for not doing enough to stimulate the economy.

PCS general secretary Mark Serwotka said the government was "spreading misery and anxiety" by spending money on making people redundant rather than creating jobs.

"Spending in the wider economy is also hit because millions of public sector workers are enduring a pay freeze - while inflation is high and the cost of household necessities, like energy, are soaring.

"Today's figures show that there has to be an alternative to the atmosphere of recession and gloom.

"The government must end the pay freeze, stop job cuts and invest in services - then people will be spending money and paying taxes."