The UK economy barely grew in the second quarter of 2011, GDP up just 0.1 per cent, as the IMF said deficit reduction should not be at the expense of growth.
The UK economy barely grew in the second quarter of 2011, GDP rising just 0.1 per cent – down from its initial 0.2% estimate.
The timing could not have been worse for the government, the depressing figures emerging in the run up to David Cameron’s speech to the Conservative party conference this afternoon, in which he will signal no change in the coalition line, insisting:
“Our plan is the right one and our plan will work.”
Responding to the grim news in the UK and the eurozone – Italy’s credit rating was cut by Moody’s overnight – the IMF said a stimulus was needed, that a eurozone solution is “overdue”, and warned governments against pursuing deficit reduction at the expense of growth.
The IMF say:
“The pursuit of nominal deficit targets should not come at the expense of risking a widespread contraction in economic activity… finding a durable solution to the euro area sovereign crisis has become more than overdue.”
On the UK economy, the headline figures (pdf) from the ONS show:
• UK gross domestic product (GDP) in volume terms increased by 0.1 per cent in the second quarter of 2011;
• Output of the production industries fell by 1.2 per cent, within which manufacturing rose by 0.2 per cent;
• Output of the service and construction industries increased by 0.2 per cent and 1.1 per cent respectively;
• Household final consumption expenditure decreased by 0.8 per cent in volume terms in the latest quarter;
• In current price terms, compensation of employees increased by 0.4 per cent in 2011 quarter two.
And to further dampen the mood, the IMF also warned a global recession in 2012 “can’t be ruled out”, citing the possibility “activity will turn downwards”.
See also:
• Barroso joins the international push for Plan B – Alex Hern, September 28th 2011
• Without growth will we even halve the deficit? – Cormac Hollingsworth, September 20th 2011
• IMF: Cutting the deficit too fast causes higher unemployment – Tony Dolphin, September 19th 2011
• New IMF boss joins calls for Plan B – Will Straw, August 16th 2011
• IMF backs Osborne – but warns of risks ahead – Tony Dolphin, June 6th 2011
23 Responses to “UK growth down as IMF warn deficit reduction should not be at the expense of growth”
Ray_North
What with Theresa May’s cat and David Cameron telling us to ‘pay off our credit cards’ this year the Tories have decided to dedicate their party conference not just to coming across as heartless, greedy bastards, but as profoundly stupid as well.
Follow the link to hear our resident economist explain how David Cameron’s economics is utterly mindless:
http://www.allthatsleft.co.uk/2011/10/conservative-conference-special-david-cameron-is-an-idiot/
oh, darling.
er, Dave, its not just France and Germany whose economy has ground to a stand still http://t.co/ZdbdATtL #cpc11 #con11
Osborne: Speaking truth to wealth and power? Really? | Left Foot Forward
[…] also: • UK growth down as IMF warn deficit reduction should not be at the expense of growth – Shamik Das, October 5th […]
Anon E Mouse
Ray_North – I’d have thought that the Labour Party would have had a better conference if it had been used to get a new leader.
All people like you are doing is giving the government an easy ride.
Think more Charles Clarke and John Reid and less Gordon Brown and Ed Balls and Labour may stop tanking in the polls….
HEATHER WAKEFIELD
UK growth down as IMF warn deficit reduction should not be at the expense of growth | Left Foot Forward http://t.co/Tgmnd9CW via @addthis