Labour claims vindication as UK economy surges ahead
By politics.co.uk staff
Labour claimed it has been vindicated by a surprisingly strong growth in the UK economy in the second quarter of 2010.
The economy surprised economists with a robust 1.1% of growth.
Most analysts expected growth closer to 0.6%, but the Office for National Statistics (ONS) figures were much more bullish.
“This is the fastest growth we have seen for over four years,” said shadow chancellor Alistair Darling.
“And this is the final nail in the coffin of the coalition’s argument that things are worse than they believed before the election. They will have to accept responsibility for the risks they are taking with the economy.”
But George Osborne said the fact that most growth came from the private sector corroborated his approach to recovery.
“Today’s figures show the private sector contributing all but 0.1% of the growth in the second quarter, and put beyond doubt that it was right to begin acting on the deficit now,” the chancellor argued.
“While I am cautiously optimistic about the path for the economy, the job is not yet done.”
The figure reflects a greatly improved performance on the first quarter of the year, when the economy grew by 0.3%.
The key services industry, which constitutes about three quarters of the UK economy, was responsible for most of the growth.
The construction industry did aprticularly well, growing at its fastest pace since 1963.
The surprising surge has several political implications.
A robust economic performance will help the Treasury cut the deficit through tax receipts. But the performance also heaps more pressure on George Osborne by corroborating the Labour argument that its response to the recession worked remarkably well.
Any drop in economic performance from now on will lead to furious Labour arguments that the Conservatives are putting the recovery at risk with their drastic deficit reduction plan.
