UK economy slows down
Preliminary figures from the Office of National Statistics (ONS) suggest that the UK economy has slowed in the third quarter of 2004.
In the three months to October 18th the gross domestic product (GDP) increased by 0.4 per cent
This though compares to growth of 0.7 and 0.9 per cent respectively in the first two quarters of this year.
The slowdown was mainly due to a decrease of 1.1 per cent in manufacturing output this quarter. In contrast, service industry output increased by 0.7 per cent.
Commenting on the figures, the Liberal Democrat treasury spokesman called on the Chancellor Gordon Brown to take action to “rebalance” the economy.
Dr Vince Cable said: “The current rate of growth of GDP is the lowest since the first quarter of 2003. If this trend is maintained it will have serious implications for the growth of the economy and the budget deficit.
“There are serious imbalances within the economy. The rise in interest rates does seem to have ‘cooled’ the housing market but it has had a negative impact on an already fragile manufacturing sector. Coupled with high oil prices we are witnessing enormous uncertainty within the sector.
“Gordon Brown cannot rely on the Bank of England alone to correct this major imbalance in the economy. It is critical that the Chancellor presents new growth forecasts in his pre-budget report to reflect this economic reality.”
Shadow Chancellor Oliver Letwin blamed Labour’s economic policies for stifling business. He said: “One quarter’s figures do not tell us much. But seven years of figures do.
“As a result of Labour’s fat government, 15 new regulations a working day, and 66 stealth tax rises, Britain’s economy has been growing at half the rate of Ireland since Labour came to power.”
A full set of national accounts will be issued on December 23rd, with preliminary estimations of fourth quarter GDP movement on January 26th 2005.
