Of all the questions troubling the UK economy over the last few years one persists: How do you get the economy growing while cutting back on public spending to reduce the deficit? Mr Cameron believes he has the answer but that still hasn’t translated into figures showing the UK economy is growing.
The latest figures show the UK economy shrank in the fourth quarter of 2012 according to the National Institute of Economic and Social Research (NIESR). The data shows the UK economy shrank by 0.3%. It may not sound much, but business confidence depends on such small percentages.
Looking at 2012 as a whole it means the economy only grow for one quarter and that growth for the year was basically flat once special factors such as the Olympics have been stripped out.
It wasn’t what the Government and employers would have wanted to hear but is supported by other figures which also make gloomy reading. Output figures show construction falling by more than 3% and production just managing 0.3% in November. The larger service sector grew by just 0.1 in October, barely registering at all.
All this doesn’t bode well for business and consumer confidence. And when confidence slips, the net result is usually redundancies and closures. Now we have HMV hanging by a thread as the administrators try to find a buyer, but perhaps it would have closed anyway.
Some people believe that a struggling economy brings out the best in people and businesses. That’s only true if they adapt. We would say whether you’re self-employed, an employee or an employer all the signs are there are tough times ahead. Still. When the economy is fragile, it follows that people’s livelihoods are too. Everyone should take the necessary steps to shore up their financial security.