By Claire West
Commenting on the latest revision to the second quarter GDP figures, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“As expected, these figures confirm the UK’s strong growth in the second quarter. The country is now in a better position than previously envisaged as the economy prepares for the full impact of the Coalition’s austerity measures, which will be introduced over the next few years.
“Despite these positive figures, it is important to remember that the necessary deficit-reduction programme will have a dampening effect on economic activity, and the risks of an economic setback will persist. The Government will have to watch the situation carefully and make every effort to ensure that private sector growth is able to make up for cutbacks in the public sector.
“The Monetary Policy Committee must reassure business that interest rate rises will not be contemplated for some time — and at least until the full impact of the forthcoming VAT increase is clear. As in the United States, the MPC must be willing to consider a further injection of quantitative easing.”