forecasts of UK economic growth of 1.7% seems unrealistic now, economists warn
Slower growth in Britain in the second quarter means the economy is weaker than thought and does not have the ability to achieve its official growth target this year.
The preliminary estimate of GDP for April to June showed the economy grew by 0.2%, instead of contracting. Although this was better than some of the most pessimistic, it is still slower than the 0.5% growth in the first quarter, which came after a 0.5% decrease in fourth quarter last year. City economists and think tanks warned that the Office of the responsibility of the budget would have to revise downward its growth forecast of 1.7% this year.
Will Straw, associate director of the Institute for Public Policy Research (IPPR) estimates that the UK will grow by only 1.2% this year.
weak growth fueling fears that Britain could lose its AAA credit rating, unless the economy recovers strongly in the third quarter.
The Office for National Statistics (ONS), allocates a portion of a slowdown in growth to a series of unique events: the royal wedding, the holiday bonus, the unusually warm April and also impact of the tsunami in Japanese global supply chains.However, Ed Balls, the shadow chancellor, said the figures were "deeply troubling" and a sign that the economy is showing signs of life in the face of a global hurricane. "When a hurricane does not copy the base of your own home. This is exactly what George Osborne did," Balls told the BBC.
In its official response, accused the Chancellor of being "in total denial." "Families, retirees and businesses may feel that tax increases and spending cuts that go too far too fast damage, but it is increasingly clear that they work," said Balls. " It is almost certain that growth provides George Osborne has been revised downward for the fourth time, which means government borrowing was revised upwards once again. "
The "poor, pathetic" growth figure has also prompted calls for a fresh economic plan B Unite, the largest union in Britain.
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