Member Article

UK economy grows

Gross Domestic Product (GDP) increased by 0.5 per cent in the first quarter of 2011, according to statistics.

It followed a decrease of 0.5 per cent in the fourth quarter of 2010 due to the severe weather conditions.

Total services output increased by 0.9 per cent in the first quarter with services sectors and manufacturing leading the revival the ONS said.

Ross Smith, NECC head of policy, said: “It is good to see the UK economy pick up after bad weather hit the final quarter of 2010.

“It is particularly pleasing to see growth return to the service sector which is catching up with manufacturing.

“With the manufacturing sector continuing to grow, the North East private sector economy looks in reasonable shape but we have a way to go before we see businesses making major new investments or jobs increases across the board.”

Output in the construction sector was down by a 4.7 per cent.

Although Chancellor George Osbourne welcomed the news Shadow Chancellor Ed Balls was quick to pour cold water on it.

He said: “These figures show an economy that has flatlined since the autumn. By making a political choice to cut further and faster than any other major economy this Conservative-led Government has choked off the recovery when it should have been secured and pushed up unemployment too.

“In the six months since George Osborne’s spending review and VAT rise the economy has ground to a complete halt and not grown at all. In contrast, in the previous six months, the economy grew by 1.8%.

“ Moreover the economy has flatlined before the bulk of the spending cuts and tax rises have kicked in.“

This was posted in Bdaily's Members' News section by Ruth Mitchell .