Angel Gurria, the OECD secretary general, said at the time: ?When you are cutting expenditure and increasing taxes then you are going to have an impact on growth. You shouldn?t even fight that.?
Of the other leading economies, the US has extended fiscal stimulus measures and doubled up on its ?money printing? programme ? measures which have rekindled confidence, and Germany is soaring on the back of strong Asian demand for its exports.
The US projected to grow at 3.1pc in the first quarter and 3.4pc in the second. For Germany, the OECD forecasts are 3.7pc and 2.3pc. Of the six countries reviewed, only Italy fares worse than the UK with annualised growth in the first three months of 1.1pc and 1.3pc in the second quarter.
Overall, though, global economic prospects are brightening. ?The outlook for growth today looks significantly better than it looked a few months back,? OECD chief economist Pier Carlo Padoan said. ?Growth perspectives are higher all across the OECD area, and the recovery is becoming self-sustained, which means there will be less need for fiscal or monetary policy support.?
Despite the sobering OECD prognosis for the UK, the economy has been given a lift by the latest index of activity in the powerhouse services sector, which accounts for three quarters of national output. Services enjoyed their fastest pace of growth in more than a year for the month of March, lifting hopes for a strong economic rebound in the first quarter after the weather-related 0.5pc contraction in the final three months of 2010.
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