The Office for National Statistics (ONS) has published its first estimate for growth in the UK in the quarter to 30 September 2023. I thought that this was rather graphic:
The big round zero has made an appearance.
As they had to say
- UK gross domestic product (GDP) is estimated to have shown no growth in Quarter 3 (July to Sept) 2023, following an increase of 0.2% in the previous quarter.
- GDP is estimated to have increased by 0.6% in Quarter 3 2023 compared with the same quarter a year ago.
- In output terms there was a 0.1% fall in the services sector, which offset a 0.1% increase in construction output and broadly flat output in the production sector.
- In expenditure terms, an increase in the volume of net trade was offset by falls in business investment, household spending and government consumption.
- Compared with the same quarter a year ago, the implied GDP deflator rose by 7.9%, largely reflecting a fall in the implied price of imports, which contributes positively to the implied GDP deflator.
There are a number of things to note.
First, if this is the case, then very obviously what is being disguised is that some parts of the economy are having a really tough time, whilst others are still growing, a little. The same will be true of regions and households. If the economy as a whole is standing still, some are not doing so. That is one of the reasons why all politicians aim for growth. Their hope is that if there is some growth, no one is left completely behind. Right now, they will be.
Second, this is apparent in some of the data by sector:
A majority of sectors are falling behind. More than that, though, the major ones that are doing so have been some of the big drivers of inflation. They include professional services and financial services. If they are declining - and other data suggests that they are - then the likelihood that inflation will fall soon is high. In that case there is good reason for interest rate cuts.
Most of all though, I read this data in combination with an article I read yesterday from the FT that noted that:
Thirteen years of Tory rule has, on the basis of their own chosen criterion for success, been a disaster. There has been growth, but at best this can be put down to rising population, almost all of which is due to immigration.
The focus of the Tories on austerity has crushed the economy.
Their belief that being a world-leading financial services centre matters has been utterly misplaced: that activity has delivered no productive investment to the UK economy at all, and has simply led to vast quantities of resources being wasted on speculation that has added nothing to human well-being.
And the very obvious need for a new direction in the economy, which the 2008 crash always indicated was required, has not been seen. Worse, no investment in it has been made.
In summary, the Tories have been a disaster for the UK.
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