Are Gordon Brown and Alistair Darling right to argue that Britain is well placed to emerge strongly from the recession? Given the UK’s overdependence on the financial sector and lower-than-expected growth in the fourth quarter of last year, you might assume not.
But new data from the OECD shows that Britain is on track to have the fastest economic growth in the first half of this year of any G7 country, bar Canada.
The UK should grow at an annualised rate of 2 per cent in the first quarter of this year and at an annualised rate of 3.1 per cent in the second quarter.
It’s good news for Labour and it looks as if fears that the next GDP figures, due out on 23 April, would show Britain falling back into recession have been overplayed.
It is also worth noting that the OECD again warns that early spending cuts could strangle the fragile recovery.
It said: “Consolidation should start in 2011, or earlier where needed, and progress gradually so as not to undermine the incipient recovery.”
But worryingly for Europe, Germany, historically the EU’s economic powerhouse, is on the verge of suffering a double-dip recession, with negative growth of 0.4 per cent in the first quarter of this year.