By Marcus Leach

Jeremy Cook, chief economist at the foreign exchange company, World First, has warned that despite GDP growth there are still dark clouds hanging over the economy.

A 0.3% GDP growth, driven by the service sector, prevented a triple dip recession, yet there are still many obstacles to overcome, according to Cook.

“So, it's not a triple-dip recession. However, today's sunshine fails to mask the dark clouds that are still gathering around the UK economy," he said.

“Inflation is too high, consumer demand and business investment too low, and the yoke of austerity remains a crushing presence.

“The numbers also show that the UK economy has, in effect, stagnated for the best part of two years despite £375bn of asset purchases from the Bank of England, the lowest interest rates on record for the longest period of time in history, and countless budget cuts in the fiscal space.

“Inflationary pressures may weaken through the summer if the tilt lower in commodities continues, but real relief will only come when wage demands start to pick-up; a distant prospect at the moment.

“As we feared, construction was the main laggard following a poor few months of weather limiting time on site while services rose by 0.6%. Despite this, the economy is 2.6% below the peak of 2008 and we can expect to see further chatter around Japanese style stimulus from the Bank of England once Carney takes over at the Bank of England in a few months’ time.

“Coalition politicians will crow about this figure, but just because we have stopped sinking doesn't mean we've stopped drowning."

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