Straws of hope from GDP

 

Anyone who still wants to be optimistic about the UK economy after today has two important facts to cling to.

The first is that these early estimates are likely to be revised - and at least some in the city think the revision is more likely to take the number up than down. Regular readers will be thrilled that our old friend, the construction sector, is in the frame again - the sharp fall in output in this sector in December is very much an estimate, which some consider a little fishy.

The second point of potential hope is that these numbers deal with the past. They do not necessarily tell us much about the future.

Taking away the one-off boost from the Olympics, the figures suggest that the UK economy was broadly flat in the second half of the year.

There have been mixed signals from the real economy in recent weeks, but few in the City are now predicting a dramatic downward lurch. The broad sense is of an economy that is treading water - not one that is about to drown.

A second consecutive quarter of falling output is possible - the much talked about triple dip. But as the Bank of England governor has pointed out recently, that is quite likely in an economy that is broadly flat.

The IMF expects Britain's national output to be 1% larger at the end of this year than at the start, and to grow by 2% in 2014.

Even that would barely take the country back to where it was at the start of 2008. But it is faster than any major economy across the Channel - the eurozone is collectively expected to shrink in 2013, with little or no growth even in 2014.

 
Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this
    -2

    Comment number 11.

    I assume Ms Flanders last report was a bit too depressing and she has been instructed to redress the balance.

    Forecasts and statistics. You can't eat, wear them or live in them but they are so very easy to produce.

  • rate this
    -9

    Comment number 10.

    Remember when labour got in power after Major.. all conservatives fault for previous 12 years now we see the reverse and its all labours fault.
    Neither is right wing neither is left wing. Neither side believes in true free markets. Since 2007 the economy obviously broken assets and liabilities of zombie banks vs world GDP. Now u can theorise all you like but interest rates are still 0.5% GAMEOVER

  • rate this
    +2

    Comment number 9.

    "Every Labour govt in this country has left an economic disaster behind it - why do people vote for them?"

    Why indeed? Three times in my life we have had a Labour government and three times they have left the place bankrupt. Its in Labour's DNA. No more Labour governments. Not ever. Never.

  • rate this
    +1

    Comment number 8.

    http://www.telegraph.co.uk/finance/personalfinance/6124212/Prudence-has-come-back-to-haunt-Gordon-Brown.html#

    Prudent George is not at all worried about GDP as he knows that Prudence is more important than bureaucrat GDP growth

    The Telegraph's synopsis was most astute

  • rate this
    0

    Comment number 7.

    4
    you are coming out with the same old tory mantra "it is the others fault."
    This is about as true as saying the earth is flat.
    No-one believes this any longer as they can see spin very easily nowadays.

  • rate this
    +2

    Comment number 6.

    "It is going to be a long hard road to address the failings of the past Labour government. We have an inflated and inefficient public sector so painful decisions need to be made. Bring on more cuts"

    Agreed. Keep capital spending provided all projects are done by the private sector. If tax revenues dip because of other countries' weakness,make up the difference with more public sector job cuts.

  • rate this
    -1

    Comment number 5.

    "Every Labour govt in this country has left an economic disaster behind it - why do people vote for them?"

    Because every Tory Government is only concerned about protecting the wealth of those who have more money than they know what to do with.

  • rate this
    +1

    Comment number 4.

    It's about time someone pointed out that this "double dip" or "triple dip" stuff is nonsense in a broadly flat economy.
    The fact is that we're doing ok to be flat and with expected future growth especially when you consider the (usual) debt mountain left by the outgoing socialists. Every Labour govt in this country has left an economic disaster behind it - why do people vote for them?

  • rate this
    +2

    Comment number 3.

    1.handles for forks
    It may be faster than any economy in Europe but it could have been so much better with a proper economic plan
    ++++
    Do you mean if the government would borrow more we would have more growth? If so we would also have more debt to pay off, and probably at a higher interest rate...

  • rate this
    +2

    Comment number 2.

    It is going to be a long hard road to address the failings of the past Labour government. We have an inflated and inefficient public sector so painful decisions need to be made. Bring on more cuts!

  • rate this
    -5

    Comment number 1.

    It may be faster than any economy in Europe but it could have been so much better with a proper economic plan - not this governments ideology which is taking the UK down the pan

 

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