Weak UK growth figures ahead of election
Updated on 23 April 2010
The parties clash over new economic growth figures showing the UK economy grew by a weak 0.2 per cent during the first quarter of 2010.
Britain's slow recovery from recession continued in the first three months of this year - with the economy growing by 0.2 per cent.
But that number came as something of a disappointment to the City, where economists thought the figure would be more like 0.4 per cent.
The figures from the Office of National Statistics show a very wide range of performances by different parts of the economy, reinforcing the view that economy may struggle to pick up much momentum this year.
With opinion polls showing the parties' standings remained tight following last night's second debate, the party leaders all seized on the figures to bolster their campaigns.
Gordon Brown hailed today's economic growth figures as a "hugely optimistic moment" but warned Britain was not "out of the woods yet".
"Our hard-earned recovery is too fragile to let these novices play with it now," he said in a campaign speech to students in Coventry. "Never were experience and judgment more called for than now."
"We must not let the Tories wreck it."
Shadow chancellor George Osborne said the figures were "disappointing".
"After the longest recession we now have a jobless recovery from a weak Government," he said.
Conservative leader David Cameron told Channel 4 News that the GDP figures would not prompt a rethink of his plans to cut public spending.
"£6bn is identifiable, doable, deliverable," he said.
The Liberal Democrats said the recovery was "barely visible".
Party leader Nick Clegg said today's economic growth figures "showed we are nowhere near coming out of the dark shadow of this very deep recession".
Analysis: Economics editor Faisal Islam
Well, today's number lived up to the billing. It was a smidgeon away from showing a renewed relapse in the economy and is Labour's last chance of a gamechanger.
Anaemic 0.2 per cent growth means that Cameron will be hammered from both Liberal Democrats and Labour for £6bn of planned "in year" cuts that will start in weeks. Brown will be hammered for a stuttering recovery.
Brown must be relieved that we avoided the double dip, but the figures were mighty close. The arctic weather in January clearly DID have an impact. Hotels and restaurants were notable drags on growth, having soared in q4 2009. The VAT rise must have had an impact in sluggish retail numbers too.
It's worth reflecting that this preliminary estimate is based on under half the data, and is highly likely to be revised UP, but not before election. But all sides will attempt to spin it in their direction.
Who it plays best for is a question of two competing political arguments: "Do we HAVE to cut now given the fragile recovery?" vs "You left us with a sluggish economy". That will play out at next week's vital debate the first way for Brown, the second for Cameron, and both ways for Clegg. Who will end up looking most convincing?
Manufacturing - which was hammered in the recession - now seems to be on the up. It grew by 0.7 per cent on the quarter - faster than at the end of last year - and that may be a sign that the weaker pound is helping manufacturers to sell their goods abroad.
Lee Hopley at the Engineering Employers Federation says Britain's factories are playing "a more substantial role in the recovery".
Business services and finance also had a strong quarter - up by 0.6 per cent - and that's an encouraging sign because it's by far the largest part of the economy.
However, the part of the economy made up of hotels, restaurants and distribution has recorded a decline in output. It fell by 0.7 per cent over the quarter.
That is significant because in the last three months of 2009, this sector grew by 1.9 per cent. So eating out and shopping has swung from giving the growth numbers a big boost to acting as a major drag.
This part of the economy contributes as much to the overall level of output as manufacturing does - so effectively its bad performance has completely wiped out the good performance from industry.
The figures indicate that retailing seems to be the big problem in this sector, and that might suggest that shopping took a knock when the government put VAT back up from 15 per cent to 17.5 per cent at the start of the year.
That would add to concerns that even the recovery we are seeing has shallow roots.
