UK growth weakest in G7 except tsunami-hit Japan

The UK’s year-on-year growth of 0.7 per cent in the second quarter of 2011 put it near the bottom of a table of the group of seven industrialised nations compiled by think-tank the Organisation for Economic Co-operation and Development (OECD).

Japan’s GDP contracted by 0.9 per cent after being devastated by earthquakes and a tsunami in March. Germany’s growth was the strongest, at 2.7 per cent.

The UK’s economy has struggled to gain momentum since the recession, as consumer spending has been squeezed by rising inflation and a weak pay growth.

The OECD’s figures also provide further evidence that the pace of the growth across some of the world’s biggest economies slowed in the second quarter of 2011.

GDP across the 34 developed nations which make up the membership of the OECD, decelerated to 0.2 per cent in the first quarter of 2011, down from 0.3 per cent growth in the first quarter of 2011.

Growth has now weakened for four quarters in a row, making the latest figures the weakest for two years.

The OECD said the slowdown was particularly marked in the European Union, where growth slowed to 0.2 per cent compared to 0.8 per cent in the previous quarter.

The gloomy figures will add to fears that the world economy could be heading back into recession, as growth in the US and European Union runs out of steam, leaving many countries struggling to cope with their debt mountains.

The think-tank’s figures do not include those of developing nations such as China, Brazil, India and Russia, which are growing at a much faster pace than most developed nations.

However, many economists fear that a slowdown in the growth of G7 nations would also have a knock-on effect on developed nations by weakening their export markets.