Sunday, August 7, 2011

UK growth rate hits bottom of G7 table

Source: Press TV

A new survey has suggested that the UK's economy is growing more slowly than every other major developed economy among the world's Group of Seven (G7) nations.

The survey commissioned by the independent Office for Budget Responsibility (OBR) showed that the UK economy was at the bottom of the G7's growth league table, British media reported.

The OBR chief, Robert Chote warned that the UK was facing “relatively weak” growth over the next few months, moreover, it was unlikely to achieve the OBR's own growth forecast.

Britain registered a growth of just 0.2 percent in the second quarter of the year as compared to Canada by a growth rate of 0.9 percent, France by 0.7 percent and even Italy and the US by 0.33 percent during the same period.

“Back in March our central forecast was for 1.7 percent growth this year, which at the time was fractionally more pessimistic than the average of the outside forecasters”, said Chote, the OBR chief.

“Since then obviously we've had weaker out-turns in the first and second quarters than most people, including us, anticipated. For the second quarter the ONS [Office for National Statistics] explained a variety of one-off factors that contributed to that”, he added.

“As a simple matter of arithmetic, in order to get to 1.7 percent now you'd be looking for quarter-on-quarter growth rates of 1 percent in the second and third quarters of 2011, and there aren't many people out there expecting that”, said Chote.

Earlier this week, the National Institute of Economic and Social Research predicted that “domestic demand will hinder any meaningful recovery this year” with growth hitting just 1.3 per cent.

They suggested that “short term fiscal policy is too tight, and a modest loosening would improve prospects for output and employment with little or no negative effect on fiscal credibility.”

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