However concerns remain about stagnant wage growth
Aloria's economy grew by 0.3% in the last quarter of 4846, meaning annual GDP growth was 2.2% latest figures show. This was much lower than forecast, as critics of the government mount concerns that their economic strategy is failing. A group of centre-left economists have criticised the government's economic strategy of cutting public spending at a time of low economic growth, causing GDP growth to stall even further. Furthemore, they have questioned the reasoning for these public spending cuts whilst also cutting taxes.
"These cuts to public services haven't reduced the deficit, as any savings have been lost through tax cuts and sluggish economic growth".
However, the government have defended their approach, suggesting the reason to cut public services was not to reduce the budget deficit, but instead to reinvest it in their Great Infrastructure Programme, which they say has led to a "sharp" fall in unemployment over the last 12 months. New figures today do show unemployment has fell to 6.1%, down from 7.5% at the start of the year. It is unclear how much of this is due to the government's Great Infrastructure Programme however.
More worryingly is the new figures on inflation and wage growth which suggest wage growth is still lagging behind inflation. Despite inflation falling in 4845 closer to the government's target of 2%,it has risen again this year. Whilst wage growth is growing, and was 2.4% in the last quarter, wages in real terms continue to decline. The Conservatives have been criticised for failing to pay enough attention to wage crisis in the country currently. Prime Minister Barnes has promised to bring "substantial wage growth in real terms by 4848.