This contrasted with growth of 0.7 per cent in the previous quarter and a healthy 1.1 per cent the quarter before that.
Immediately, the claims and counter-claims began, with opponents of the government’s austerity programme arguing that, by cutting public spending too quickly and too deeply, they had blown the economy off course.
However, chancellor George Osborne resisted calls to change policy, claiming that the measures taken so far had restored Britain’s international credibility and, without December’s poor weather, the figures would have been healthier.
Nonetheless, the government is likely to be disappointed by the latest numbers, which show the economy still has some way to go before it returns to normality. An early rise in interest rates may have also become less likely, despite inflation continuing to remain above target.
Of course, the figures may yet be revised upwards and the relatively mild weather so far in 2011 may help to reverse some of the losses. Nonetheless, today’s news has shown once again the delicate balancing act government has to perform in keeping the economy on track.
For more information, please visit www.harris-lipman.co.uk
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