LONDON: Britain is cementing its economic growth recovery, official data revealed yesterday, as the government’s deficit-reduction programme won support from the Standard and Poor’s ratings agency.
But analysts voiced doubts surrounding the duration of the recovery as separate figures revealed a widening of the country’s public deficit, adding to market concerns over Europe-wide growth.
The Office for National Statistics said British gross domestic product (GDP) grew by 0.8 percent in the third quarter, confirming previous estimates, while the data came at the end of a week in which Britain announced a larger-than-expected drop to unemployment.
Also on Friday, the ONS said the government’s public sector net borrowing requirement, excluding taxpayers’ money used to rescue banks, rose to £16.5bn ($27bn) in November compared with £15.6bn a year earlier.
Ahead of the data, Standard and Poor’s confirmed its top ‘AAA’ credit rating for Britain, noting the government’s commitment to reducing its budget deficit even if the deep austerity measures continue to slash public sector jobs.
Offsetting these losses has been a pick-up in jobs created by the private sector.
“Markedly rising employment and a robust housing market will likely underpin consumer spending over the coming months,” Howard Archer, chief European & UK economist at consultants IHS Global Insight, said yesterday.
Archer also noted however that “if the recovery is to be sustained at a healthy pace, it really does need a marked, extended pick up in business investment and for exports to improve markedly”.
Gross domestic product grew by an upwardly-revised 1.9 percent in the third quarter or three months up to the end of September, compared with output a year earlier, the ONS added on Friday. The prior estimate had stood at 1.5 percent.
At 0.8 percent, the quarter-on-quarter rate marked the fastest pace for more than three years.
The government welcomed the figures.
“Today’s data show that the recovery has been stronger than previously thought and that the government’s long term economic plan is working,” a Treasury spokesperson said.
AFP
