ONS figures show UK economy now smaller than when Coalition took office. Unions say govt ‘hell bent on knocking the stuffing out of Britain”
According to the Office for National Statistics, the economy contracted by 0.7% in the second quarter of 2012.
TUC analysts say the economy is now smaller than when the Coalition government took office in May 2010.
They are tying the 9.7% fall in construction output over the last 12 months to the collapse in public sector investment during the same period.
TUC general secretary Brendan Barber said: “The government’s austerity strategy is failing so spectacularly that is has wiped out the recovery completely.
“The recent GDP fall is as bad as anything we saw following the 2008 financial crash.
“The UK is on course for a longer depression than the 30s, the tightest squeeze in living standards since the 20s and more than a million young people are currently out of work.
“Ministers cannot just repeat the same old excuses – Europe, bank holidays and the previous government – for the economic mess they are presiding over. They need to change course as their policies are causing permanent damage to our economy.
“The government must abandon self-defeating austerity and prioritise public and private investment in infrastructure and in the futures of our long-term unemployed to get Britain working again.”
Financial observers say the GDP figures have already increased fears on the markets about prospects for growth in the UK economy. Government critics are calling for ministers to shift resources to infrastructure to boost growth and stave off any further contraction in the construction and manufacturing sectors.
This follows a warning last week from the IMF that it had downgraded its forecast for the UK’s economic growth for 2012 to 0.2%.
Unite general secretary Len McCluskey said: “George Osborne has left Britain on the starting blocks.
“We are a country of winners but we are being led by a bunch of economic losers.
“With almost 90% of the cuts still to come the UK government seems hell bent on kicking the stuffing out of Britain while doing nothing to sort out the mess left by casino capitalism.
“The next generation are becoming the lost generation while many working people spiral into debt and despair. Britain needs hope. We need a government with some Olympic spirit, that can show some leadership and genuinely do what is best for this country.”
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