LONDON (MNI) – Chancellor of the Exchequer George Osborne has
welcomed today’s better-than-expected growth figures but also warned
that the euro zone crisis will continue to hamper the UK’s economic
recovery.
Osborne defended the government’s austerity measures as having
anchored stability.
“The situation in the euro zone is very difficult,” he said.
“This journey is the only way that will take us to prosperity,” he
added in televised comments.
National Statistics data released earlier today showed economic
output rose at its fastest quarterly pace for a year in the third
quarter, but much of this was only a bounceback from anaemic growth in
the second quarter.
National Statistics said that GDP rose 0.5% on the quarter in Q3
and was up 0.5% on the year. This was a little above the median forecast
for a 0.4% increase on the quarter and the year.
The bounce in output on the quarter, which is still below trend,
follows growth of just 0.1% in Q2, when activity was depressed by the
impact of the Royal Wedding and Japanese Tsunami to the tune of around
0.5 percentage point.
National Statistics would not comment on how much of the growth in
Q3 was a direct bounceback from the special factors in Q2, but it seems
clear that much of the growth seen in the latest quarter was a direct
result of the dampened activity in the previous quarter.
This means that underlying Q3 growth could be significantly weaker
than the headline number suggests. In a press conference following the
release of the data a National Statistics official acknowledged that
growth in Q3 would have been boosted the unwinding of the special
factors, adding that there would be a simple arithmetic effect where
stalled output in Q2 would result in higher growth in Q3.
–London bureau: +4420 7862 7499; email: ukeditorial@marketnews.com
[TOPICS: M$B$$$,MABDS$]
