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Treasury remains upbeat despite GDP figures

The UK Treasury Department has remained fairly beat, citing expectations that the UK economy will rebound in the second half of 2009, despite greatly disappointing GDP figures this week. The fall of 0.8% in the economy in the second quarter of 2009 was significantly greater than the 0.3% forecast by many analysts although the Treasury had actually forecast a reduction of around 1%. Why this reduction of 1% was not in the public domain is debatable, which is one reason why many people are sceptical of the claims.

The 2.4% fall in GDP in the first quarter of 2009 caught many people by surprise although the government is making analysts aware that this figure may be revised in the short term. While a reduction in the fall of 2.4% would be well received by the market and the government, it could do call into question the accuracy of prominent data regarding the UK economy. If analysts are unable to believe the figures which they are being given on a monthly basis, how do they plan for the future and how do they plan their investment strategies?

The ding dong battle between the UK government and investors regarding the short, medium and longer term direction of the UK economy is set to roll on for many months to come!

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