No Christmas presents for the economy
We have become pretty used to bad news in the economy. But today’s Office of National Statistics paint a bleak picture for the 3rd quarter but also present a challenge for 2011.
The Office of National Statistics found that output in the construction, mining and quarrying industries all fell while there was a recorded fall in service industry output.
The downward revision of growth in the economy indicates that 2011 will be another tough year for the public with the VAT rise to 20 percent expected to hit consumer spending still further on top of the effects of government spending cuts.
Mainstream economists have tried to play down the downgrading of economic forecasts for GDP growth in 2010.
But even data analyst firm Global Insight’s Howard Archer had to admit:
“We expect growth to lose significant momentum over the coming months as fiscal tightening increasingly bites and adds to the pressures on already stretched consumers.”
Left Economic Advisory Panel Coordinator Andrew Fisher on the other hand agreed the prospects for the economy were “grim.”
But he hastened to add that in the long term Britain could be in the same situation as Ireland who recently took out a controversial IMF loan to help keep their fledging economy afloat.
“Continued slow growth – or even a slip back into recession – will encourage the Coalition government to make further cuts and could send the UK into a spiral similar to Ireland.
“It is clear that the labour movement needs to force a major shift in economic policy in 2011 to prevent misery for millions. That may require ousting the current government.”