When Gordon Brown was Britain’s finance minister, before he took the top job, was always able boast that he had kept the economy in a robust state and much better than most of the rest of Europe. But the latest figures from the UK’s statistics office show economic growth is now anaemic as private homebuilding slumped and mortgage approvals declined pointing to further sharp falls in house prices.
In the first three months of this year, GDP growth was up 2.3% compared with the same period last year. In the second quarter it was just1.6% – its weakest rate in three years.
Between April and June, business services expanded by just 0.1%. Industrial output fell by 0.5% and construction output was down by 0.7%. UK homebuilders have announced more than 4,000 job cuts in recent weeks.
The Bank of England expects the British economy to slow, perhaps sharply, this year and cannot decide whether to raise interest rates to address inflation or cut them to boost economic growth.