Does the UK now have a two speed economy with banks growing but factories slowing?

George Osborne has been slammed for claiming the economy is “motoring”



Chancellor George Osborne boast the economy was "motoring" after figures showed gross domestic product – the value of everything the country produces – grew 0.7% in the three months to June, making up for a weak 0.4% growth in the first quarter.

But it means GDP per head, a measure of the nation’s wealth on an individual basis, is only just getting close to pre-recession levels after seven long years.

Osborne , visiting a motorcycle factory in the Midlands, said: “It’s vital we stay on the road that we’ve set out on.”

But experts warned the UK now has a “two-speed economy”.

The recovery has been driven by the service sector. This accounts for the bulk of the economy, includes everything from banks to restaurants and it grew by 0.7%. But factories struggled as the strong pound hit exports, with manufacturing shrinking by 0.3%, its worst performance since the start of 2013.

Last quarter’s 0.7% growth means the economy expanded 2.6% in the past year.

But Chris Williamson, economist at Markit, said: “Had the UK continued the same trend prior to the financial crisis, the economy would be 10.7% larger than it is.”

Chris Leslie, Labour Shadow Chancellor, said: “UK growth needs to be stronger than this to withstand instability from Europe, China and the world economy.”

TUC General Secretary Frances O’Grady said: “We were told there’d be a march of the makers. Instead manufacturing continues to decline.”

Experts reckon the growth makes an interest rate rise more likely either late this year or early next.

http://www.mirror.co.uk/news/business/uk-now-two-speed-economy-6156009#ICID=sharebar_twitter

Dickhead inherited a growth rate of 2.4 and that was after the banking collapse and he is boasting out this! Manufacturing has got miles to go before it catches up.

IT'S probably more of a "three or four speed economy" by now...

MUCH like here in Oz and over in North America..

WELCOME to the realities of the current "Rational Economics" preferences for 'globalisation', international "free trade agreements" that favour multinational corporations over individuals, communities and states, and the increased 'casualisation' of the workforce ~ along with the weakening of OH&S protections, industrial relations standards, and environmental controls.