By Marcus Leach
David Kern, Chief Economist at the British Chambers of Commerce (BCC), believes that revised GDP figures announced by the Office for National Statistics highlight the need for bold measures to boost growth.
Official data released today (Thursday) has shown that the UK economy didn't contract as much as was first thought, the revised figure of contraction, 0.5%, is marginally better than the original 0.7% prediction.
However, whilst this is a very marginal improvement, there is no hiding from the fact that the economy isn't in a great place, and there is still a need for fresh measures to boost growth.
“The revised GDP figures show smaller declines in both construction and manufacturing output than previously estimated," Kern said.
"Although this is a welcome revision, we believe the new figures are still too gloomy. Three consecutive quarterly declines in GDP since the fourth quarter of 2011 are difficult to reconcile with rising employment and falls in the jobless rate. However, it is clear that the UK economy has been stagnant for too long and bold measures are needed if we are to return to growth.
“There is some positive detail in the new figures. The quarterly fall in consumer spending was less than originally thought, and there was a modest increase in business investment.
"On the downside though, exports declined in Q2 and there was a large trade deficit. The figures also confirm that government consumption rose over the past year despite the fall in GDP, which goes against the popular assumption that spending cuts are happening quickly.
“The UK economy will face difficult challenges over the next year as the government perseveres with its deficit cutting plan, and continued problems in the eurozone will create obstacles for our exporters. Bold initiatives are needed from government so the private sector can drive recovery, invest, export and create jobs.”
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