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Comment on the new GDP figures

Charles Levy

23 July 2010

Charles Levy, senior researcher at The Work Foundation said:

'Today’s GDP figures from the Office for National Statistics show the UK continuing to recover strongly from recession. Growth of 1.1% in the second quarter of this year represents a much faster turnaround than seen in previous recessions – this is double the rate of growth seen in the recovery from the 1990s recession.

'Last week’s labour market data showed the recovery being driven by the knowledge economy with strong growth in private knowledge intensive employment sectors. Today’s figures paint a similar picture with strong growth in business and financial services (1.3%) as well as government and other services (0.9%). In contrast to the contraction in construction employment, output from this sector grew by 6.6% in the second quarter of 2010.

These figures should however, be read with caution. Public spending cuts are yet to bite and are likely to slow down the recovery. Recent GDP data releases have also been subject to major revisions in recent months. These certainly are positive signs but it is too early to say that we are out of the woods just yet. It took eight to ten years for our economy to re-create the jobs lost in the last two recessions and in that context these are very early results.'