The British economy: March of the builders

Posted: October 25, 2013 in economy
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SINCE the start of the financial crisis Britain’s economy has been on a roller-coaster ride. GDP sank 7.2% over six consecutive quarters in 2008 and 2009. It bounced back strongly in 2010 and 2011 (see chart, below-left). But by late 2011 the economy had tumbled into a double-dip downturn, thanks to strong headwinds from the continent and domestic austerity measures; the economy grew just 0.2% in 2012.But lately the news has improved, buoying the spirits of George Osborne, Britain’s beleaguered Chancellor of the Exchequer. On October 25th the Office for National Statistics announced that the British economy grew 0.8% in the third quarter: a 3.6% annual rate and the fastest pace since 2010. In the first nine months of the year, the economy grew 1.8%, beating consensus forecasts. Analysts are expecting the spell of good growth to continue, unlike the “dead-cat bounce” of 2010 when growth was not sustained. Consumer and business surveys are upbeat; people think the economy will continue expanding rather than stutter again. Citigroup, a bank, now expects Britain’s economy to grow by as much as 3% in 2014.Strong growth may boost the public finances, but the news is not all good for Mr Osborne. In the 2011 budget he promised a recovery that would rebalance the British economy towards manufacturing: “a Britain held aloft by the march of the makers”. But something appears …

via Economic Crisis


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