Cabinet boosted by UK economic growth
Britain’s economy grew by 0.8%, latest figures show, in a significant improvement on analysts’ predictions.
Third-quarter figures from the Office for National Statistics (ONS), released at 09:30 BST today, were always unlikely to improve on the 1.2% growth seen between April and June this year.
Analysts had forecast growth would return to a sluggish 0.4% rating, writing off the second-quarter boost by attributing it to a spike in seasonal construction work.
But statistics showed the economy had grown by 0.8% from July to September. Commentators said that growth in underlying terms had continued at about the same rate as in the second quarter.
GDP figures: Political analysis
“Allowing for the recovery in Q2 following the bad weather at the start of the year, the underlying growth in Q3 is broadly similar to that in Q2,” the ONS said.
“The growth in the third quarter is due to growth in each of the component aggregate series, namely services, construction and production.”
Manufacturing made the largest contribution to growth, with output rising by one per cent after a 1.6% increase in the second quarter.
The news will be a huge boost to David Cameron and George Osborne, after sterling hit a new low against the euro on Monday. Cabinet is meeting in Downing Street this morning.
Shadow chancellor Alan Johnson responded: “Today’s figures show that growth has slowed in third quarter of this year.
“They also show that momentum remains from Labour’s support for the economy – especially the construction sector.
“The risk going forward is that the government has a plan to cut one million jobs, but no plan to support the private sector in replacing them,” he added.
“Yes the deficit needs to be reduced – but it needs to be at a pace that the private sector can manage.”
Today’s figures, the first for a period wholly presided over by the coalition, are likely to draw attention to the government’s robust approach to reducing the deficit.
Labour leader Ed Miliband yesterday repeated his claim that their policies were a “gamble” with the economy.
The recovery remains uncertain, however.
“Economic activity seems set to be seriously pressurised over the coming months by major fiscal tightening increasingly kicking in, persistently tight credit conditions, slower global growth and ongoing significant constraints on consumers,” Howard Archer of IHS Global Insight said.
