Germany is growing at 1.5% while France is at 1%. By comparison, the UK grew at just 0.5% in the same period and much was due to the snow bounce.
New figures out today show that the UK is slipping behind its major competitors in the growth stakes. Germany reported growth of 1.5 per cent for Q1 2011 while France reported 1%. By comparison, the UK grew at just 0.5 per cent in the same period and much (if not all) of that was due to the snow bounce meaning that British growth has been flat over the last six months.
In another sign of the faltering recovery, industrial production barely grew in March, reports (£) this morning’s Financial Times:
Production rose by 0.3 per cent in the final month of the first quarter – much less than the 0.8 per cent growth forecast by economists, largely because of weaker North Sea oil extraction, according to Office for National Statistics data on Thursday.
Underlying the slow growth was the weak performance of the manufacturing sector, which makes up almost 75 per cent of heavy industry. Manufacturing output grew by 0.2 per cent in the month, after remaining flat in February.
A prolonged slowdown in manufacturing would be a big threat to the recovery because it has been one of the main drivers of growth so far – producing about a third of the increase in gross domestic product since the end of the recession despite making up just 13 per cent of the economy.
And to further add to the chancellor’s woes, one of the founding members of the Office for Budget Responsibility (OBR), Geoffrey Dicks, voiced doubts over whether the government was on track to eliminate the deficit by the election.
He told (£) the FT:
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“I signed my name to a forecast of underlying productivity growth of 2 per cent but if I were still at the OBR, that is something I would now be questioning…
“My own guess here is that the weakness of productivity growth in the recovery so far is telling us not just that productivity has been lost but that its rate of growth from here on could also be below the 2 per cent that we take as ‘constant’.”