IoD Reaction to GDP figures

Dated: 27 April 2011

Commenting on the latest GDP figures, Graeme Leach, Chief Economist at the Institute of Directors said:

“The preliminary GDP figures are a very mixed bag with grounds for both optimism and pessimism. Pessimists point to the fact that GDP is stagnant with output unchanged over the past 6 months. This is very much in line with the IoD’s long held view that this recovery will be more L than V shaped. Today’s GDP numbers add further weight to the case against an interest rate rise. But the optimists can’t be ignored either. Leaving aside the construction sector – which contracted sharply – overall services output rose strongly (by 0.9 per cent), although this did follow a decline of 0.6 per cent in the previous quarter.

Graeme Leach also said:

“We shouldn’t place too much emphasis on the Q1 data. The more important figure will be Q2 when we begin to see the squeeze on real incomes really kick-in and what effect this has on consumer spending, together with the implementation of the public spending squeeze”.

ENDS

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Email: edwin.morgan@iod.com
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