Official figures claiming Britain is out of its record-long recession provide “scant comfort” for the millions still unemployed, trade unions and left economists said on Tuesday.
A moderate 0.1 per cent expansion in the economy between October and December ended six straight quarters of shrinking output, according to first estimates from the Office for National Statistics (ONS).
The growth is weaker than the 0.4 per cent predicted by economists, which sparked fears that Britain is still on track for a “double-dip” recession.
Overall, the economy slumped 4.8 per cent last year – the biggest annual contraction since records began in 1949 – and it has lost 6 per cent since the recession began in 2008.
The government boasted that Tuesday’s figures were a testament that its economic measures to remedy the crisis were working.
A Treasury spokesman said that ministers would continue to “support the economy” – a policy which has seen billions of pounds of public money thrown at the banks, resulting in an estimated £178 billion national deficit.
Unemployment stands at 2.5 million and, according to the Charted Institute of Personnel Development, two-thirds of those who managed to find work after being made redundant were forced to take a 28 per cent pay cut.
Left economists have argued that investment in public services and the manufacturing industry coupled with a crackdown on wealthy tax dodgers and executive bonuses are the most sustainable ways of stabilising the economy.
Left Economics Advisory Panel chairman John McDonnell MP warned on Tuesday: “Harsh public spending cuts and job losses would risk sending the UK into a prolonged recession.”
TUC general secretary Brendan Barber said: “With the threat of a double-dip recession looming large, it would be madness to cut public spending now.
“Unemployment will increase again, with more people continuing to face long spells out of work. No sectors of the economy are fully recovered and areas such as construction are still really struggling.”
Mr Barber’s Scottish counterpart Grahame Smith expressed fears that Scotland may remain in recession for a further quarter as unemployment has soared to 200,000.
He said that the ONS figures provided “scant comfort for the millions struggling to find work. In this context, immediate and severe cuts in public spending will almost certainly plunge the economy straight back into recession.”
Taken from Morning Star