UK set for among slowest growth in EU

New research by the European Commission shows that only Greece, Italy, Portugal and Cyprus will grow more slowly than the UK in 2011, reports Will Straw.

Global growth forecasts, Autumn 2011; click to enlarge

The UK is set for among the slowest growth in Europe according to the new forecasts. New research by the European Commission shows that only Greece, Italy, Portugal and Cyprus will grow more slowly in 2011.

The new report (pdf), published yesterday, warns UK growth will be just 0.7 per cent in 2011. The chart below compares growth predictions for 2011 for each of the 27 countries in the European Union, plus China, Japan and the US.


The UK section of the report (pdf) explains:

“It has been clear for some time that domestic demand growth in the coming years would be weak.

“With government consumption falling, consumers struggling with falling real incomes and the stock cycle having peaked, the only bright spot on the horizon was business investment which is overdue a rebound after its unprecedented collapse during the recession.

“The surprise has been the degree of weakness in household consumption, which was 1.7% lower in the second quarter of 2011 than in the same period in 2010.”

UK growth for 2012 is predicted to be 0.6 per cent. In addition to the countries listed above, the Netherlands and Hungary are expected to grow more slowly but 19 EU countries will grow at a faster pace in 2012 including Ireland at 1.1 per cent and Spain at 0.7 per cent; unemployment, meanwhile, is expected to rise to 8.6 per cent from 8.1 per cent at present.

In 2013, unemployment is expected to stay relatively flat at 8.5 per cent while growth will rise to a sluggish 1.5 per cent.

The Office of Budget Responsibility is currently predicting growth in 2011 of 1.7 per cent, 2.5 per cent in 2012, and 2.9 per cent in 2013 although this is likely to be significantly downgraded later this month.

And while all their remedies may not be to everyone’s liking, a group of “30 of the City’s top figures” have joined the call for a Plan B. In a letter to the chancellor, published in the Daily Telegraph, senior business leaders are calling for the immediate scrapping of the 50p tax, raising the tax threshold by £1,000, and bringing forward infrastructure spending. The total cost of the package would reach several billion pounds.

See also:

Osborne’s cuts having “damaging effect” on Northern Ireland peace processKevin Meagher, November 10th 2011

New report dubs Osborne’s economic strategy a “myth”Ed Jacobs, November 9th 2011

“Underlying picture remains weak”, “paltry”, “bumping along the bottom” – growth reactionShamik Das, November 1st 2011

Ignore Osborne’s spin; a jobs recession is inevitableTony Dolphin, November 1st 2011

Fast spending cuts push economy from fastest quarterly growth for a decade towards zeroCormac Hollingsworth, November 1st 2011

13 Responses to “UK set for among slowest growth in EU”

  1. Alex Braithwaite

    RT @leftfootfwd: UK set for among slowest growth in EU http://t.co/skqdtvnD

  2. Patricia Farrington

    Another graph to shame Osborne: UK set for among slowest growth in EU: http://t.co/efdLaedN by @wdjstraw #TheLostRecovery

  3. Redstar PCS Stoke

    “@leftfootfwd: Another graph to shame Osborne: UK set for among slowest growth in EU: http://t.co/FLglLj6y by @wdjstraw #TheLostRecovery”

  4. Michael

    UK set for among slowest growth in EU l Left Foot Forward – http://t.co/yWlO8QLh

  5. Pauline

    UK set for among slowest growth in EU l Left Foot Forward – http://t.co/yWlO8QLh

  6. Martin Deane

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  7. raincoat optimism

    Economic news just gets worse; @CarlRaincoat http://t.co/yWiJUuyZ & @wdjstraw http://t.co/kWWKS0TT report on the latest EU growth forecasts

  8. PCS DWP North Staffs

    “@leftfootfwd: Another graph to shame Osborne: UK set for among slowest growth in EU: http://t.co/MdJ3hHwh by @wdjstraw #TheLostRecovery”

  9. Born írt:

    #bornirt UK set for among slowest growth in <b>EU</b> | Left Foot Forward: In addition to… http://t.co/9ums9dsH

  10. PoliticsUK

    UK set for among slowest growth in EU | Left Foot Forward

    If our growth will indeed be slower than most EU… http://t.co/LrthyFPC

  11. Kevin Richards

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  12. Frank Owen

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  13. New student visa system turning prospective entrepreneurs away from the UK | Left Foot Forward

    […] a country where businesses cite the Government’s increasingly strict immigration policy as a drag on growth. Given UK universities are second only to the United States on quality it is an increasing concern […]

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