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Cameron Seizes on GDP ‘Good News’

By George Parker and Chris Giles, Financial Times
Thursday, 25 Oct 2012 | 1:45 AM ET

David Cameron on Wednesday promised "the good news will keep coming" as his error-prone government prepared to seize on new data that is expected to show Britain's double-dip recession is over.

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Mr Cameron hopes Thursday's release of gross domestic product (GDP) statistics for the third quarter — including the period of the London Olympics — will be a political tipping point, even though he will also warn that the economy still faces tough times ahead.

Private sector economists expect third-quarter growth to be about 0.6 per cent following nine months of contraction. It comes after other positive recent data showing rising employment and falling inflation.

Economists say the British economy will remain weak at that rate of growth. Labour will also argue that even growth of 1 per cent would only bring the economy back to where it was a year ago and that a "one-off Olympic boost" is no substitute for a long-term economic strategy. The Office for National Statistics has valued Olympics ticket sales at 0.3 per cent of national income.

A return to growth, however, offers Mr Cameron political respite after weeks of self-inflicted problems including the resignation of Andrew Mitchell, the botched West Coast main line franchise auction and his launch of a barely formed energy policy.

Ed Miliband, Labour leader, said the whole government was playing "follow my leader" and taking its cue from a prime minister adrift who "doesn't do detail".

Mr Cameron's promise of more "good news" in the Commons drew cheers from Tory MPs, who were well aware that the prime minister is given 24 hours advanced notice of the Office for National Statistics growth figures.

Any breach of the embargo is strictly forbidden and Downing St hastily insisted that Mr Cameron was referring to good news "in general", not to the figures he had been shown just hours before arriving at the Commons. Sterling rose 0.46 per cent against the dollar.

Andrew Dilnot, chairman of the UK Statistics Authority, has argued strongly against pre-release of statistics to ministers. The authority said it was looking into Mr Cameron's comments.

Mr Cameron and Nick Clegg, deputy prime minister, will still stress that the economy faces a long road to recovery, echoing the call for "patience" made by Sir Mervyn King, Bank of England governor, on Tuesday.

Mr Clegg told a City audience on Wednesday that the economy was "on the right path" but that the recovery was "slow and fitful". He added: "Repairing the damage following the shock in 2008 is a gradual healing process."

Senior government figures also said they wholly endorsed Sir Mervyn's cautious message, conscious that voters will continue to feel the pain of cuts — including the removal of child benefit from better-off households next year — for years to come.

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