Tuesday, 15 October 2013

Britain on track at last as employment rises


Base from official figures, Britain is finally “on track” to recover from the economic crisis with employment back at the same level as in 2008.

The economy grew by 0.6 per cent between April and June despite earlier speculation that there may have been a renewed recession. This has been followed by another rise earlier in the year.

There are optimistic signs of growth with employment and the number of hours worked returning to pre-crisis levels, ending a five-year slump.

But, in totality the size of the economy is still way smaller than previous to the crisis and politicians were last night eager to stress that Britain still faces years of austerity and improbability before it will have fully recovered.

George Osborne, the Chancellor, said that the country was “on the mend” as he prepared to make improving the economy his key message at the next general election.

“The figures are better than forecast,” Mr Osborne said. “Britain is holding its nerve. We are sticking to our economic plan.

“Britain is on the mend, but we’ve got to stick with the plan because there’s still a long way to go.”

David Cameron, who went on his annual summer holiday, added: “We are on the right track — building an economy for hard-working people.”

Nonetheless, senior politicians also gave warning to people “not to get carried away”and stressed that ministers were not complacent.

Vince Cable, the Business Secretary, said that he would not be prepared to declare that the economy had recovered before there had been another “two or three years” of strong growth.

Neil Bentley, the deputy director-general of the CBI, said that the figures confirmed that Britain was on the road to recovery although there were likely to be “a few bumps ahead”.

“Underlying conditions are quite weak as consumers are still saddled with debt and despite the global economy picking up, the potential for getting knocked off course remains,” he said.

According to the Office for National Statistics, growth over the past year has been 1.4 per cent, with the strong performance of service firms such as hotels and restaurants leading the recovery.

The rise in gross domestic product (GDP) of 0.6 per cent throughout the second quarter of the year was the first time since 2011 that Britain has seen back-to-back quarterly growth, and doubled the 0.3 per cent figure for the previous period.

“After five years, people are seeing that Armageddon has been narrowly avoided and while they realise the economic world is precarious, life is going on,” Tim Martin, chairman and founder of JD Wetherspoon pubs, said.

Economic experts said that an analysis of the figures showed that domestic economic demand was growing steadily and the main drag on the economy was external, foreign influences.

The International Monetary Fund (IMF) also warned that the eurozone countries face years of economic stagnation without greater efforts to boost banks and employment.

“Incomplete or stalled policy commitments at the national or euro-area level could also reignite financial market stresses” the IMF said in a review of the 17-nation currency bloc.

“Over the medium-term, there is a high risk of stagnation, especially in the periphery [of the single currency area].”