The Chartered Institute of Personnel and Development (CIPD) warn the UK government’s deficit reduction methods are “crippling the economy for years to come.” The Office of National Statistics (ONS) most recent economic report prompted this warning. The first quarter 2011 gross domestic product (GDP) was up 0.5 percent, 2nd quarter GDP growth was 0.2 percent. The ONS conclusion for these low figures was attributable to the Japanese earthquake/tsunami and the Royal Wedding Bank holiday. The ONS analysis did not quantify how these events impacted the GDP.
The Trades Union Congress (TUC), CIPD and The Work Foundation took exception with these conclusions. CIPD’s chief economist, Dr. John Philpott, labelled the growth rates as “desperately poor.” The use of these onetime phenomena divert attention away from the government’s policy of deficit reduction to stimulate economic growth. The government asserts the reduced deficit will increase business activity and career opportunities in the private sector.
Work Foundation researcher Andrew Sissons considers the GDP report proof that the recovery has yet to gain any traction. 300,000 jobs were added to the UK economy in the last 12 months with no corresponding increase in GDP. Mr. Sissons states the economy cannot continue to add jobs without an increase in productivity.
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