George Osborne gives cautious welcome to rise out of recession George Osborne, the chancellor, has tried to tread a path between optimism and a premature identification of green shoots. George Osborne was given much needed but probably temporary respite as the UK economy raced out of recession, growing 1% in the three months to September, the fastest rate for five years. But the majority of the growth was due to one-off factors, leaving the chancellor to face business and political calls to do more to stimulate growth in the autumn statement in six weeks' time, or risk the economy slipping into recession for a third time in 2013. Government efforts to lift the national mood were also blighted by news of the closure of the Ford Transit plant in Southampton as well as unexpected cuts at the firm's plant in Dagenham. The closures mean the loss of 1,400 skilled jobs. Osborne tried to tread a perilous path between confidence-generating optimism and a premature identification of green shoots, the error perpetrated by previous Tory chancellors. "If we stick with what we're doing, getting the deficit down, creating jobs, fixing the deep-seated problems in the British economy then I think you can see now that it is going to deliver the kind of underlying prosperity we want to see in this country," he said. Nearly 0.7% of the 1% growth was attributed to Olympic ticket sales and activity deferred from the second quarter, when the Diamond Jubilee holiday was held. That left underlying growth at around 0.3% in the quarter, and Treasury was keen to stress this performance was unlikely to be repeated in the coming months, confirming a fragile recovery. The figures also confirm that growth throughout 2012 will have been flat, in contrast to the 0.8% growth predicted by the Office of Budget Responsibility as recently as March. In June 2010 the OBR predicted 2.8% growth this year. David Cameron said the figures showed the economy was on the right track, and repeated his claim that the economy was healing, a phrase that leaves unclear when the patient will be discharged. The business secretary, Vince Cable, struck a more sceptical note, saying: "This is not recovery in the traditional sense since this is not a recession in the normal sense. It remains a very deep crisis and we are very cautious. The better than expected headline growth placed some pressure on Labour to rethink the tone of its attacks on the coalition's fiscal consolidation strategy. The shadow chancellor, Ed Balls, ceded little ground, saying the recovery was not sustainable and Osborne was sticking to a plan that is not working. He pointed out: "Osborne said two years ago the economy would grow by 4.5% over these two years, and it's grown by 0.6%. It's been a fifth of the growth of America or Germany. He said he'd get the deficit down; our borrowing in the first six months of this year is up. And families are really seeing their living standards down, and we've got really high long-term youth unemployment. That is not a working plan. Labour is expecting growth to remain weak in 2013 due to consumer indebtedness and low bank lending, as well as the decreasing activity in the eurozone, the UK's main export market. The OBR had predicted investment would rebound from 0.7% this year to 6.4% next year. Will Straw, from the left-of-centre IPPR thinktank, said such optimism seemed "surprising at the time but now looks extremely unlikely." He added: "Over the last year, investment has grown just 0.3% and the government's policy framework is deterring major infrastructure projects in energy generation, rail and airport expansion." The figures also showed a continued contraction in construction despite repeated coalition efforts to lift house-building and reform what it describes as a dysfunctional market. The construction industry contracted by 2.5% over the past three months, compared with 3% the quarter before, meaning a year-on-year contraction of over 10%. In a potentially significant policy intervention, the Future Homes Commission, chaired by the former Audit Commission chief John Banham, suggests housebuilding could be tripled if local authority pension funds pooled resources to finance new construction. John Cridland, director general of the CBI, urged the government to do more to lift the economy outside London. He said retailers were having a torrid time and construction companies were in the doldrums, but exporters, both of manufactured goods and the services, were doing really well. Balance the whole thing out, to fellow citizens on the street it's just a flat economy Cameron was rebuked by Andrew Dilnot, chair of the UK Statistics Authority, for his comments at prime minister's questions on Wednesday. Cameron told MPs the "good news will keep coming" on the economy, which was widely construed as him breaking the embargo on today's release of GDP figures. He had access to the numbers 24 hours in advance. Dilnot wrote to Cameron urging him to overhaul the current "unsatisfactory" arrangements for pre-releasing statistics. It is clear from media reports that, although this may not have been your intent, your remarks were indeed widely interpreted as providing an indication about the GDP figures. The Statistics Authority's position on pre-release access remains clear. We believe the current practices for pre-release access to official statistics are unsatisfactory, not least because they put those who have received such access in a difficult position.