Today's Coming Crisis Movie

Thursday, April 14, 2011

OECD: UK's economic growth to be one third of major world economies

Britain’s growth over the next three months will be roughly one third the pace of other major world economies, according to forecasts from the Organisation for Economic Co-operation & Development.

n an update that will dent the Chancellor’s claim to be driving Britain back to competitive prosperity, the leading think-tank expects annualised quarterly growth of just 1pc for the three months to the end of June, compared with an average for the G7 leading economies excluding Japan of 2.9pc.

Growth for the first three months of the year is also expected to have been below average, at 3pc compared with the 3.2pc for the G7 excluding Japan. The OECD is still in the process of evaluating the impact of the devastating earthquake and tsunami on the Japanese economy.

Last month, the OECD downgraded its growth forecasts for the UK this year from 1.7pc to 1.5pc as a result of the bad December weather, which feeds through to this year’s figures, and the tax rises and spending cuts.

Philip Shaw, economist at Investec, said the latest OECD comparison with other leading economies did not flatter the UK “largely because of the size of the austerity measures and the downside risk to growth they cause in the short to medium term”.

The OECD has been highly supportive of the Chancellor’s austerity programme, urging him just last month to “stay the course” as he grapples with the country’s record budget deficit and attempts to wean the economy off state spending and a dependence on the City of London. (read more)