US GDP growth slower than UK


Published: Friday 30th January 2015 by The News Editor

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The UK’s claim to be the fastest growing major economy last year was today cemented by official figures confirming that US gross domestic product (GDP) rose by 2.4% in 2014.

It comes after the Office for National Statistics (ONS) said earlier this week that Britain’s GDP grew by 2.6%, though it slowed more sharply than expected to 0.5% in the last three months.

In the US, expansion also slowed in the fourth quarter but the overall growth was the same as had been predicted by the International Monetary Fund (IMF).

Data from Washington’s Commerce Department showed consumers pushed up spending but business investment, trade and government spending weakened in the world’s largest economy.

Other members of the G7 group of advanced nations have yet to report official growth figures for the year.

The IMF has forecast that Canada also grew by 2.4%, with Germany on 1.5% and France and Japan well behind and Italy contracting.

It expects the US to surge ahead for this year with growth of 3.6%, while UK growth is pencilled in at 2.7%.

Chancellor George Osborne used this week’s GDP figures to claim that Britain’s recovery was on track and as May’s election approached, a change to the Government’s plan risked returning Britain to “economic chaos”.

However shadow chancellor Ed Balls pointed to the “concerning slowdown” of growth in the fourth quarter.

Today’s US data comes after more worrying figures about the eurozone economy as inflation fell further into negative territory, reaching minus 0.6%.

The slide into deflation threatens to plunge the 19-nation bloc – also facing stagnating growth – into a damaging spiral of falling prices.

The latest figures were seen as justifying the recent decision by the European Central Bank (ECB) to unleash a 1.1 trillion euro (£830 million) stimulus programme to revive the moribund eurozone economy.

Europe is also facing turmoil following the election of the radical Syriza party to power in Greece, on a pledge to end austerity measures imposed as part of a bail-out of the debt-laden country.

This week Bank of England governor Mark Carney urged eurozone policy makers to take bold action, including moving towards fiscal union, to drag it back to health, in comments seen as a thinly-veiled attack on German-led austerity.

Published: Friday 30th January 2015 by The News Editor

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