THE UK economy ground to a halt in the three months to June 30, with Gross Domestic Product (GDP) up just 0.2 per cent in the second quarter, according to the Office for National Statistics, down from 0.5 per cent in the previous quarter.
‘The positive news is that the British economy is continuing to grow and is creating jobs,’ claimed Osborne.
But shadow chancellor Ed Balls said: ‘The economy has effectively flat-lined for nine months and this is very bad news for jobs, living standards, business investment and for getting the deficit down.’
The Institute for Public Policy Research (IPPR) was also unimpressed, warning: ‘Outside of London, in particular, the recession continues to be felt and the UK economy might as well still be in recession, even if technically it isn’t.’
Services grew 0.5 per cent, but production contracted by 1.4 per cent, with mining and quarrying down by a huge 6.6 per cent.
Agriculture declined by 1.3 per cent while construction grew 0.5 per cent, recovering after two weak quarters.
Unison General Secretary Dave Prentis said: ‘Behind today’s stagnant growth figures are human stories of families struggling and businesses failing.
‘Ever since the economic crisis, Unison has been warning that public spending cuts would poison our economy and mean misery for our society.
‘Private companies that depend on public contracts are struggling as budgets are trimmed.
‘And sacking tens of thousands of public sector workers is disastrous for local economies.’
PCS General Secretary Mark Serwotka said: ‘Today’s figures show that there has to be an alternative to the atmosphere of recession and gloom.
‘The government must end the pay freeze, stop job cuts and invest in services – then people will be spending money and paying taxes.’
GMB General Secretary Paul Kenny tried to pretend that there were good and bad Tories.
He condemned the Chancellor George Osborne and made a call on Cameron to act.
He said of Osborne: ‘He is blind to the fact that the economy is stalling as a direct result of his policies.’
He added: ‘Cameron and the cabinet have to stop Osborne strangling the economy by insisting that deflation is not the way to growth and a balanced budget.’
It was reported yesterday that Cameron’s permanent secretary, Jeremy Heywood, had met Treasury officials and ‘read them the Riot Act’.
Asked about these reports, Cameron said: ‘The chancellor’s growth review has the 100 per cent backing of the prime minister and No 10 Downing Street – absolutely working together to drive that through government.
‘I don’t think you have seen in recent years a prime minister and chancellor working as closely together as George Osborne and I do.’
But Shadow Chancellor Balls said: ‘After two weeks of growing squabbling between No 10 and No 11 about who was to blame for phone hacking, we are now seeing No 10 and No 11 squabbling over who is responsible for the economy flat-lining.’