VINCE Cable has expressed "cautious optimism" that Britain's economy is on the mend as more figures out today suggest the recovery is gaining momentum.
The Liberal Democrat Business Secretary qualified his remarks in the wake of the latest GDP figures last week which saw the UK economy grow by 0.6% in the second quarter, saying that it was not yet known whether the bounceback was sustainable.
"It will need to go on for some years and it's got to have to be of the right kind," he insisted. "We can't repeat the mistakes of the past, which led to the financial crisis. We have to make sure the growth is in exports, it's in business investment and it's targeted on the long term, which we are trying to do through our industrial strategy."
When it was pointed out that since the crash hit, manufacturing was down 10% and overall growth was still down 3.3%, Mr Cable said Britain was a poorer country than it was in 2008 and the nation's finances had to be rebuilt in the right way.
He said the focus on skills training, building up innovation and developing procurement within the UK would need to continue for several years. "It's a long-term strategy; jumping on a few quarters of figures does not resolve that," added Mr Cable.
His remarks came as the Centre for Economics and Business Research today revised upwards it 2013 forecast for the UK economy from 0.7%, which it gave in April, to 1.0%. It said it expected a GDP figure of 1.5% next year.
The economic forecaster also said:
l A recovering housing market would support consumer spending despite squeezed real incomes.
l Economic growth would, however, slow from 1.5% in 2015 to 1.3% in 2016 as UK Government spending cuts started to bite harder.
l UK Government spending would rise in real terms this year, decline marginally in 2014 and 2015 with spending cuts only starting to bite "significantly" in 2016.
The CEBR said a range of reports it worked on suggested the economic picture had become more positive in recent months.
The ICAEW/Grant Thornton Business Confidence Monitor showed confidence stood at its highest level since 2010 in Q2 2013.
The VocaLink Take Home Pay Index suggested prospects were also improving for consumers with the indicator showing pay growth in the private sector picking up in recent months.
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