AUSTERITY is now the new normality, a poll has suggested, as official figures showed the UK narrowly avoided a triple-dip recession – growing by just 0.3% in the first quarter of the year.
George Osborne insisted the figure – higher than the 0.1% growth most economists had predicted – proved the British economy was "healing" yet there was palpable relief at the Treasury that another damaging downturn had been avoided.
Insisting the UK was "making progress", the Chancellor said: "I can't promise the road ahead will always be smooth but, by continuing to confront our problems head-on, Britain is recovering and we are building an economy fit for the future."
Ed Balls, for Labour, branded the growth figure "lacklustre" and said the Coalition had overseen the "slowest recovery for over 100 years". He added: "The longer we continue to bump along the bottom, the more long-term damage will be done.
"Britain's struggling families and businesses cannot afford another two years of this."
John Swinney, the Scottish Finance Secretary, urged the Chancellor to change course, saying: "Osborne must change the UK's approach to the economy and deliver greater capital investment to stimulate growth and support construction.
"We must not allow Scottish economic recovery to be blown off course by the misguided policies of his government."
Howard Archer, an economist at IHS Global Insight, said the higher-than-expected GDP figure was a "pleasant surprise".
He added: "It does not materially dilute belief that the UK still has a very tough job to generate even modest sustainable growth."
Philip Shaw, chief economist at Investec Securities, added: "The distinction between recession and recovery is marginal and threatens to overshadow the more important issue of how and when the UK economy will achieve a sustainable lift-off."
The figures from the Office for National Statistics (ONS) showed a mixed picture.
Services, which account for more than three-quarters of GDP, grew by 0.6% between January and March – driven by the retail, hotels and restaurant trades sector. Demand for electricity and gas during the cold weather saw output from the energy supply sector rise 0.5%.
However, construction activity plunged 2.5% and is 18.1% below pre-financial crisis levels. Production and manufacturing edged 0.2% higher at the start of the year but are also significantly down on 2008 by 13.4%.
Importantly, the ONS growth estimate takes into account only 44% of total GDP output and is subject to change in two future revisions – the next on May 23.
Politically, the GDP figure has given David Cameron some breathing space; a triple-dip recession coming on the back of the IMF downgrade and the stripping of Britain's triple A credit rating by the agency Fitch would have seriously undermined the Conservatives' campaign in the forthcoming English local elections.
Yet a YouGov rolling poll suggests households are becoming used to Whitehall cuts and "austerity is the new normal". The survey shows the number of people who claim the cuts are having no impact on their lives has increased from 18% to 32% while the proportion of those who say they have impacted has dropped from 71% to 55% since January 2011.
Labour's "too fast, too deep" criticism of UK Government cuts – while still compelling to many – is losing traction as fewer people say they feel directly affected by them as time goes on.
In February 2011, 58% thought the cuts were being made too quickly, but the latest results this month show this has dropped to between 40% and 46% while the number of people who say the cuts are too slow has increased from 5% to 13% over the same time period.
Similarly, when people are asked if the cuts are too deep, the number agreeing has fallen from 51% to 40% while those claiming the cuts are too shallow has risen from 7% to 12%.
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