No triple dip – not that it really ever mattered
It is an encouraging number for the chancellor and for the economy. A sigh of relief, more than “mission accomplished”.
There is little sign that the Treasury or the chancellor is getting carried away with this, and rightly so. 0.3 per cent growth merely makes up for the fall in the previous quarter. Growth has been flat for six months. Of course it could have been worse, but it is a relief that there is now no new recession.
Longer term, however the picture is unchanged. The economy is flat to very slowly growing, liable to be hit by any shock that comes its way. The chancellor’s original deficit reduction plan pencilled in 7.1 per cent growth by now. In his time at Number 11, we have had 1.8 per cent. Since the spending review, that was 6.5 per cent, and we have got 1.2 per cent (although that was negative last year, so it’s progress).
Services have bounced back alongside the stabilisation of the eurozone. Production did not do too well, but was helped by a reversal of the North Sea oil outtage. Construction recorded an appalling figure of -2.5 per cent in the quarter. It is not difficult to see where growth might come from.
So a neutral end to a bad few days for the Chancellor.
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