On economic growth, the UK government is benefiting from low expectations. Friday’s estimate that GDP grew by 0.4 per cent in quarter two appears impressive when set against 0.2 per cent in Q1.
But the latest figure merely confirms that mediocrity is the new norm for Britain. The economy has now grown below 0.5 per cent for six consecutive quarters – the longest stretch of anaemic growth since the eight quarters from January 2008 to December 2009.
The manufacturing sector, which Conservatives boasted would be aided by the fall in the pound, is now officially in recession (having contracted for two consecutive quarters, most recently by 0.9 per cent). And the trade deficit – the difference between what the UK imports and exports – has widened from £4.7bn to £8.6bn.
As Grace Blakeley noted in her piece in this week’s NS, Britain’s goods exporters have been “ravaged by the preceding 40 years of currency inflation”. The country remains desperately over-dependent on consumer spending (British household finances are in their worst state since 1988) and the financial sector.
Philip Hammond has boasted that “the economy has grown every year since 2010”. But that any growth at all is now welcomed is a mark of the UK’s woes. Britain has endured its slowest economic recovery in history and average wages are not forecast to return to their pre-crash peak until 2025.
And yet worse could be to come. The UK, it bears repeating, has not left the EU yet, but has already paid an economic price for the Brexit vote (becoming the slowest-growing major country). And, by historic standards, Britain is overdue another full-blown recession. With household debt at £25bn, the national debt at £1.8trn (85.8 per cent) and interest rates already at near-record lows (0.75 per cent), the UK will have precious little firepower to deploy when the next crisis hits.
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