Economy sluggish in second quarter

THE UK economy grew by 0.2% in the second quarter, according to figures released this morning.

The latest figure means the economy has largely been flat since September last year with GDP shrinking by 0.5% in the last quarter of 2010 and growing by the same figure in the first three months of 2011.

It will put Chancellor George Osborne under renewed pressure to defend the Coalition Government’s plans for growth and the speed and extent of its cuts in public spending.

The weekend saw Business Secretary Vince Cable call for the Bank of England to expand its quantitative easing programme in an effort to stimulate greater demand.

Ian McCafferty, CBI chief economic adviser, said: “This is the third consecutive quarter in which special factors, such as the winter weather, unseasonal North Sea maintenance, the Japanese tsunami and an extra bank holiday, have made interpretation of the data more difficult and have depressed economic activity over the short term.

“There is likely to be some bounce back over the autumn, but it’s clear that the underlying economic recovery remains fragile and difficult.”