26 Jul 2011

Growth figures depressing political economy

Chancellor George Osborne (Getty)Not sure about this story in the Telegraph suggesting something close to fall-out between Numbers 11 and 10. But what there is in both buildings is alarm at what is looking like an “L-shaped recovery”.

That’s how Vince Cable, round the corner in the less closely-connected Business Department privately talks about what we may be looking at.

Vince Cable, of course, goes one step further and talks openly about Bank of England power preserves like quantitative easing, much to the annoyance of the Treasury.

But they talk about such things privately there too. And where the Telegraph story is undoubtedly right is that anaemic growth figures are meaning that the Government is missing its internal growth strategy targets.

Seeing that the British Retail Consortium thought the takings at tills rose by 1.4 per cent January to June and that, they said, was wholly due to the fact that consumers were having to pay a higher rate of VAT, I asked someone who should know whether the VAT rise was propping up the watery growth figure and whether it would be even closer to zero without it.

I’m told that “at the second decimal place I am sure you will get a small positive contribution from retail volume growth” but nowt more than that. I pass it on, in case the same thing was occurring to anyone else.

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