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Economic growth stutters at 0.2% 26 July 2011

The latest figures, from the Office for National Statistics (ONS) this morning, follow growth of 0.5 per cent in the first three months of 2011 and the slowdown was attributed partly to the extra April bank holiday for the royal wedding.

The ONS said that events during the second quarter of 2011 may also have had an impact, including the earthquake in Japan, but added that it was difficult to quantify precisely the effect they had. 

Ian McCafferty, chief economic adviser to the Confederation of British Industry (CBI), said: “This is the third consecutive quarter in which special factors, such as the winter weather, unseasonal North Sea maintenance, the Japanese tsunami and an extra bank holiday, have made interpretation of the data more difficult and have depressed economic activity over the short term.

“There is likely to be some bounce back over the autumn, but it’s clear that the underlying economic recovery remains fragile and difficult.”

Will Straw, associate director of the IPPR think tank, warned that the UK was showing signs of following Japan’s recent history of a 10-year malaise in its economic growth.

The ONS figures show that growth in the services and finance sectors increased by 0.7 per cent, compared with an increase of 0.4 per cent in the previous quarter.

Transport, storage and communication increased by 1.1 per cent, compared with an increase of 2.5 per cent in the previous quarter. Government and other services showed zero growth, compared with a 1.1 per cent increase in the previous quarter.

Distribution, hotels and restaurants increased by 0.3 per cent, compared with an increase of 0.9 per cent in the previous quarter.



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