New figures out this week show that the UK economy experienced a 0.5% growth in the first quarter of 2011.
The Office for National Statistics released preliminary estimates which show that GDP grew by 0.5% between January and March following an unexpected 0.5% contraction in Q4 2010.
The figures show that the manufacturing and services sectors had performed well with the former experiencing a growth of 1.1%, however the construction sector didn’t fare so well. Results show that this sector was one of the worst hit with a contraction of 4.7% at the start of 2011.
Chancellor George Osborne has welcomed the results, however top economists have given mixed results to the growth figures.
“These figures were mixed and well below the Office for Budget Responsibility prediction that the economy would grow by 0.8% in the quarter. Given the fragility of the recovery, it is vital for the government to persevere with policies that support growth, and remove the obstacles that prevent businesses from creating jobs and exporting,” commented chief economist at the British Chamber of Commerce David Kern.
Labour were also quick to criticise the growth figures – they called the economy flat and said recovery had been “choked off”.
Following positive comments from George Osborne, shadow chancellor Ed Balls commented, “If George Osborne thinks zero growth over six months is good news and a sign that the recovery is on track then he is more out of touch and out of his depth than I feared.”
Many experts now believe that the low growth figures could cause the Bank of England to put interest rate rises on hold in a bid to combat inflation.