British Deputy Prime Minister Nick Clegg said on Thursday that data showing Britain's economy shrank more than expected in the first quarter underlined the need to accelerate efforts to free up investment and credit.
Speaking between meetings in Berlin about the eurozone troubles, he said:
The revision of the growth figures for the first quarter was very disappointing. I think it is the moment to really shift up a gear to ensure that, as we maintain market confidence in our plan to balance the books and rid the UK of its structural deficit, we do more to ... act as a guarantee to mobilise more investment in infrastructure and housing and get more credit to the real economy. There is clearly a demand issue in the economy.
John Walker, the chairman of the Federationof Small Businesses, sounded a note of optimism despite today's disappointing GDP figures and the generally high inflation. He said:
Despite all this, confidence among small businesses has picked up, and this resilience needs to be supported by Government if they are going to make use of it to pull Britain back out of recession.
He said the Government needs to focus on job creation, business investment and on boosting consumer confidence.
The chief economist at the British Chambers of Commerce has said he has "doubts about the accuracy" of today's GDP figures from the Office for National Statistics (ONS), which suggest the economy is shrinking faster than expected. David Kern said:
Fundamental doubts about the accuracy of the ONS's estimates persist. Virtually every business survey has indicated positive growth in the economy in the first quarter.
Furthermore, the ONS's own labour market figures have shown an increase in employment and a 0.9% increase in the actual number of hours worked, which makes a quarterly fall in GDP difficult to comprehend. It is possible that the GDP estimate will be revised upwards later in the year.
Deputy Prime Minister Nick Clegg on today's GDP figures: "The revision is very disappointing...we are shifting up a gear in our zeal to see the economy grow".
– Ed Balls MP, Shadow Chancellor
What more evidence can David Cameron and George Osborne need that their policies have failed and that they now need a change of course and a plan B for growth and jobs?
It's now clear that this is a recession made in Downing Street by this Government's failed policies. Despite all the problems in the euro area, France, Germany and the eurozone as a whole have so far avoided recession and only exports to other countries stopped us going into recession a year ago.
The result is that Britain is now in a weaker position if things get worse in the eurozone in the coming months."
On the GDP figures being revised down, the Prime Minister's spokesman says: "It confirms this is a tough economic situation and we will take time to recover from the biggest financial and debt crisis of our lifetime. "
He said that "we can't be immune to what's happening on our doorstep".
He also added that looking at the breakdown of GDP figures: "Taking trade goods to non-EU economies grew by 4.4% on the previous year and goods to EU economies fell by 3.3%."