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Sunday, 21 May 2017 15:11

Economic growth worse than feared

We’ve been told for weeks that spending is slowing in the UK as consumers demonstrate nervousness – and today we were given the statistics.

Britain suffered a major slowdown in the economy– worse than previously thought – as people started spending less on retail and reigned in the pennies as living costs continued to heighten.

The economy ground to 0.3 per cent in the period Jan-Mar which has alarmed economists as this is the most sluggish it has been in a year and is worse than previously anticipated.

It’s not great news for the government who are currently entrenched in a battle with other political parties as the general election hots up and the poor showing has led many in the Labour party, not least Shadow Chancellor John McDonnell, to hit out at the level of austerity the Tories have imposed and the effect that it is currently having.

He is on record as saying that the cuts that the current government has put on the country has hindered growth and has put people in positions that they can’t get out of financially – using the latest news as back-up to his claims.

So, what is the alternative? Labour’s alternative is to spend their way out of the problem – which is precisely what got us into the mess we are in now. So, there’s no easy solution.

According to the Office for National Statistics, the slump is down to the fact that there has been a considerable slowdown in the ‘powerhouse services sector’ which makes up over three quarters of the British economy.

Shops and other retail services have also suffered heavily and many of these stores have expressed concern as the sales are at the lowest that they have been for nearly eight years.

The crux of the problem is that the cost of living is too high. Rather than spending on material things, people are having to watch the pennies and keep everything back to cover the costs of rising bills and rents.

It has been an issue since the turn of the year. Inflation is at its peak and is at the maximum level that it has been for over three years. In March, it was nearly 2.4 per cent.

It isn’t all bad news though, according to the statistics, there is positivity on the construction and agriculture front – they both saw better than expected results in the first four months of the year, as did production.

We’ll probably be hearing more about the slump, especially as there is a general election coming, as all the political parties get ready to wage war and begin making accusations as to who’s fault the current situation is.

What is known, however, is that it is the people, the everyday man and woman who will be feeling the effects of these results for a while to come, and if it continues in this vein it could lead to even more uncertain times and difficulties ahead. 

The best bet is to control finances as best you can. Always be prepared for things to get worse financially and always make sure there is a safety net so that should things get a little more difficult, it doesn’t leave you in a sticky situation.

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