U.K. Ministers Urge Caution After Triple Dip AvertedGonzalo Vina
Senior ministers in Prime Minister David Cameron’s government voiced caution after official data showed Britain avoided a triple-dip recession with stronger-than-expected growth in the first quarter.
Chancellor of the Exchequer George Osborne spoke of indications the economy is recovering, while Deputy Prime Minister Nick Clegg said there was no room for complacency. Business Secretary Vince Cable described the figures as “modestly encouraging.”
“Today’s figures are an encouraging sign the economy is healing,” Osborne said in a statement released by the Treasury in London. “Despite a tough economic backdrop, we are making progress.”
Britain’s economy grew by 0.3 percent in the first three months of the year, the Office for National Statistics said. That was more than the median 0.1 percent forecast in a survey of 37 economists by Bloomberg News. The figures provide relief for the government after Fitch Ratings downgraded the U.K. and the International Monetary Fund called on Osborne to relax fiscal tightening last week. The opposition Labour Party said the data are “lackluster.”
“We all know there are no easy answers to problems built up over many years, and I can’t promise the road ahead will always be smooth, but by continuing to confront our problems head on, Britain is recovering and we are building an economy fit for the future,” Osborne said.
“It’s a better number than many people had been anticipating,” Clegg, who heads the Liberal Democrats in the Tory-led coalition, told LBC radio. “That’s obviously a welcome thing but I don’t want anyone to think we are out of the woods yet.”
Similarly, Cable, another Liberal Democrat, said the recovery is a “marathon, not a sprint.”
“Today’s figures are modestly encouraging and, taken alongside other indicators such as employment figures, suggest that things are going in the right direction,” Cable said. “However, there is still a long way to go.”
While the U.S., German and Canadian economies are back above their pre-recession levels, U.K. GDP remains 2.6 percent below its peak in the first quarter of 2008. It means Britain remains mired in its longest peacetime slump since at least 1920, according to the National Institute of Economic and Social Research.
The economy has grown 1.2 percent since the third quarter of 2010, just after the coalition came to power in May of that year.
“People are worse off than when this government came to office,” Labour’s Treasury spokesman, Ed Balls, said in an e-mailed statement. “The longer we continue to bump along the bottom the more long term damage will be done. Britain’s struggling families and businesses cannot afford another two years of this.”