I'm on tour this morning - doing a round of BBC local radio stations to discuss GDP data. I do not, of course, leave BBC to do so - I just get bounced from one station to another for some time. It's a slightly strange experience - having to remember just what audience you're talking to is one of the problems when you're on your seventh in an hour, but also quite fun.
I suspect there will - as predicted by many - be a rise in GDP. Let's presume it is 0.6%, as has been suggested by the weight of opinion. Is that good news? I'm afraid not. My briefing for the BBC said:
1) If growth has happened it's regional at most - south east only.
2) If there is growth it is a bubble - in the stock market because of
quantitative easing being used for speculation and housing being boosted with tax payer
money in a way that will keep out many new buyers whilst supporting their parent's housing value. This is bubble economics and bubbles both burst and create
inequality on the way and after. There will be tears resulting from this one day. and maybe soon.
3) If this is growth let's not get excited until we have recovered the 9% fall in real income for most people since 2008.
4) Let's also not celebrate until millions of people are back at work - especially 1 million one young people.
5) What we need is what I call a Green New Deal - £50 billion a year to create real jobs to insulate all houses, generate green energy and build green transport infrastructure. This would turn the economy around better than £400 billion spent so far on bailing out banks and housing which has only boosted the south east.
No doubt I will elaborate on air, but you get my drift - which is that boom and bust is back. Brown wanted rid of it. Osborne is using it in the hope he'll win an election on the back of it. And then he'll really go for
establishing Rentier UK.
Great post Richard (looking forward to your 100,000th…) No doubt the Coalition will be crowing about the success of their austerity policies because of this GDP blip. I’m also amazed that the BBC is actually getting some balance in their reporting instead of merely parroting government propaganda, as is their wont.
Well the BBC’s Stephanie Flanders seems over the moon about the figures.
UK recovery ‘past halfway mark’
http://www.bbc.co.uk/news/business-23446056
I agree with all your points Richard … as well as boom and bust is back. Mixing all that in with Gideon’s help to buy (Ponzi?) scheme, and borrowing a phrase from Star Wars … “I have a very bad feeling about this”.
Ditto the ‘infrastructure projects’ – also rent for investors.
The £50b of our money going into them will only be ‘seeding’ money
So – big contracts for investors, for which contractors will then bring in foreign labour – so no earn/spend stimulus there.
But plenty of ‘rent’, long term.