The Economic growth figure from the Office for National Statistics remains unchanged from the initial estimate it gave last month. While this is not a reason to cheer, it does however confirm that the UK has indeed avoided falling into a triple-dip recession. It also suggests signs of recovery in the economy, but the key question remains "how long can this continue?".
The services sector, which accounts for around three quarters of the economy, was the main driver for growth, expanding 0.6% in the quarter. This sector has recovered steadily and is now above its pre-recession levels. Meanwhile, the construction sector continues to flounder and still remains to be a significant drag on economic growth.
“These figures did not suggest the recovery in the economy would continue to strengthen,” said Steve Picarillo Lead Analyst of SJP Financial the corporate consulting arm of Creative Advisory Group, Inc.
To this end, on Wednesday, the International Monetary Fund (IMF) urged the government to do more to stimulate growth as well as continuing austerity measures. This reflects concerns that UK economic growth has been persistently weak, since it first fell into recession following the financial crisis in 2008. The GDP growth in the UK has been slowed by weakness in the domestic and global markets. The report also indicated that slower wage growth was hurting people's ability to spend, dampening the prospects for growth.
“With the aforementioned weakness in employment and the fact that employment and average earnings both fell in the first quarter as compared to their level in the previous quarter, there is reason to question the strength and sustainability of the recovery,” continued Mr. Picarillo.
Indeed, as a further indication of the task at hand, on Wednesday the IMF also warned the UK was still a "long way from recovery" and called on the government to increase infrastructure spending in the near-term in order to boost growth. Looking at these statistics, specially the increasing pressures on the consumer, a significant driver in the recovery, one need to question the sustainability of the recovery. “Furthermore, the increasing weakness in China and the persistent recession in the Eurozone, adds further fuel to the questioning fire. Time will tell, but I don't things all that rosy on the other side of the pond, Mr. Picarillo concluded.
Company Name: SJP Advisory Group for Creative Advisory Group, Inc.Contact Person: Steve Picarillo
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Phone: +1 212 810 2164
Address:132 East 43rd Street, MS 359
City: New York
State: NY
Country: United States
Website: www.stevepicarillo.com
Source: www.abnewswire.com
