The ONS has published the latest GDP data this morning:
Main points
- Monthly real gross domestic product (GDP) is estimated to have fallen by 0.1% in January 2025, mainly caused by a fall in the production sector, after growth of 0.4% in December 2024.
- Real GDP is estimated to have grown by 0.2% in the three months to January 2025, compared with the three months to October 2024, mainly because of growth in the services sector.
- Monthly services output grew by 0.1% in January 2025, following growth of 0.4% in December 2024, and grew by 0.4% in the three months to January 2025.
- Production output fell by 0.9% in January 2025, following growth of 0.5% in December 2024, and fell by 0.9% in the three months to January 2025, with manufacturing output driving both the monthly and three-month falls.
- Construction output fell by 0.2% in January 2025, following a fall of 0.2% in December 2024, but grew by 0.4% in the three months to January 2025.
In other words, we're still in the land where Labour is having so much effect on the economy that the impact can be described as the square root of dddly squat.
By now Labour should have been changing economic sentiment if they were going to do so. The impact of their period in office should have been significant enough for that to be seen. And in reality, I am sure that it is being seen. People do not believe in Labour. They have lost any confidence that their election might have provided last July. No one, including business and most people who voted for them, thinks anything is going to get better.
All this is because of Labour's fiscal rules, whose sole reason for existing is to provide people with economic confidence. They literally have no other purpose. They have no economic relevance. They only exist for the political purpose of boosting sentiment. They are failing to do so.
Yesterday, however, Starmer confirmed that he is sticking to them even though Cabinet ministers are apparently protesting about them.
Labour has, in that case, a choice to make. It can sink slowly, inexorably, and inevitably over the next four years in what might well be its last ever administration, or it can abandon Starmer, Reeves and fiscal rules altogether whilst seeking to meet the needs of real people in this country.
Change, or die, then. What will Labour do?
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Reading “Get In”, Starmer comes across as clueless politically and ditto with respect to economics. His political controller is McSweeney (& his boys) and he got into his position as “chief of staff” by displacing Sue Gray. McSweeney is, according to the books narrative, focused on voters & their needs. If this is the case, & given the non-performance of LINO (almost 1 year in office and +2 years to prepare for office) one wonders what is happening? In retrospect LINO seems to have been more focused on winning than governing. Certainly the focus 2021 – 2024 was turfing out those that did not toe the dear leaders line on e.g. Israel. The focus now, would seem to be nest-feathering for a wipe out in 2029. The likelihood that LINO MPs will do something is close to zero, most are nutless, gutless, spineless & brainless (& despised by McSweeney & his crew btw). In fairness they were all hand picked by LINO central office.
Much to agree with
Thank you and well said, Mike.
Apparently, the engagement with US big finance is intensifying as the golden parachutes have to be prepared.
I have heard from friends in the west country and north Midlands about the open level of discontent where people are likely to make small talk. It sounds as if Labour is heading for a historic defeat, if not extinction.
“UK economy shrank unexpectedly in January”, BBC News (14 March 2025)
https://www.bbc.co.uk/news/articles/cly3mdlk70no
When policies are designed to cause austerity, or are known to cause austerity, this was not unexpected.
GDP continues to bump along with little indication that we are about to turn a corner, and little action from the government to make that happen. Cuts in benefits spending (and increased spending on defence) are likely to reduce GDP rather than increase it. Reactions to geopolitics and stock markets retrenching will make people more cautious too.
The next inflation figures for the 12 months to February 2025 are due out on 26 March, when we have the “definitely-not-a-budget” spring statement. The rise in February 2024 will fall off the 12 month look back. So any drop will no doubt be presented as a triumph, along with the another inevitable fall in March. So can we cut interest rate, hmm?
Labour has been set on this course for a long time – at the very least since the members had the audacity to elect Jeremy Corbyn as leader. At that point a coalition of interests combined to:
1. Destroy Corbyn irrevocably.
2. Destroy Labour party democracy so no left-leaning leader, MP, or councillor would be selected or elected again.
3. Destroy dissent within the PLP by imposing a Stalin-like discipline system, focussed especially on left-leaning female, non-white, often Muslim MP’s, councillors and CLP officers. A specially vicious effort was also made against left-leaning Jewish party members who did not subscribe to the by-now compulsory Zionism imposed from the top downwards. A very special and vindictive attempt was made to destroy and expel Diane Abbot but that proved too much even for the thugs currently running Labour, and on Wednesday, at PMQs, I spotted her sitting in defiant splendour, on the front seat just below the gangway.
4. A campaign of deliberate deception having won Starmer the leadership, it was then tried on the electorate, and succeeded due to the total collapse of the Tory party and the fact that Reform UK weren’t quite ready yet.
5. Starmer became PM without having prepared, or communicated a plan for governing beyond keeping to Jeremy Hunt’s spending plans.
6. Once in Downing St., Starmer began a 5 year election campaign, to win the support of Reform supporters, taking the “Labour” party to the right of the Conservatives, by punching down proudly, on the poor, on immigrants, and on the sick, the disabled, the unemployed. Every decision was taken with a view to attracting votes from the right, none because it might benefit the country. He isn’t governing, he is campaigning (badly).
7. IMHO the only possible way the Starmer/Reeves/McSweeney/Macfadden/party donors/controllers Labour Party power bloc can be broken is by a very sizeable parliamentary rebellion from what is left of the PLP. But I’m not convinced it will happen, and if it does, I’m not convinced it will break the stranglehold of neoliberalism on the UK. If such a rebellion DOES happen it will owe more to the howls of a worried middle class affected by the collapse of the NHS & Social Care, the breakdown of social order, railway and sewage crises bin strikes, and extreme weather, than by any miracle of cohesiveness and direction on the left.
8. My “fear” is that only seeing Reform failing massively in government, 2029-????, will finally convince the electorate that neither neoliberalism nor fascism can save us.
9. A man came to read my “smart” meter yesterday to take an export reading. We get on well and agree on a lot politically, but he is typical of those who are won over by the arguments of the right on immigration. That’s two visits so far. Today he had a trainee with him so I had an audience of 2!. I had to work the “smart” meter for them. He hates Starmer, spoke well of Corbyn, wanted something done about immigration, and get this, oh dear, he liked the look of Mr Rupert Lowe! (I gave him a little background on Lowe). We discussed taxation, public spending and I tried my best on immigration. The omnibuses round here are full of genuinely good people like him. They are not being won over, because they do not hear contrary points of view. They are attracted by those who have not yet failed, whose views are wall to wall across MSM & Meta/X controlled algorithmic Social Media. How do we win over the meter readers?
Welcome back to the connected world again!
What an excellent way to put the question.
I meet them and I don’t know the answer as yet.
1st rate post Mr J – excellent real world stuff.
It is the anti-Left that runs Labour now – they hate the Left so much that is has become pathological. That sort of thinking does not allow for epiphanies, no matter how slight.
The die is set I’m afraid.
And it will be everyone else’s fault of course when it all cones undone.
The real issues of course is how we split the pie and not so much the price of it AND what GDP measures because not all of what is included is necessarily positive
We COULD even have a smaller better divided pie and all be better off in terms of standard of living
It’s hard to picture Starmer and Reeves surviving if the economy starts tanking alongside austerity (which is inevitable giving that government spending contributes to GDP). The only question being, how long will they last before the pressure gets too much.
Labour with Starmer, Reeves and McSweeney are for some reason incapable of change re their self-imposed fiscal rules. Which really is bizarre – compare them to CDU’s Merz who was supposed to be a fiscal hawk, but changed his tune immediately after the election. One has to wonder what their end-game is. Is there an end-game at all? Why being so stubborn when circumstances have changed as much as they have during the last 6 months. What are they really trying to achieve? Look at the Cold War period – 50s, 60s and 70s – people went along with it because they thought there was something in it for them as well – strong welfare state. You can’t ask for sacrifices and give nothing in return but yet again another episode of austerity. As those three are incapable of change (and I’d really like to know why) this can’t end up differently but with complete implosion of Labour or Labour getting rid of them before this implosion happens.
Much to agree with
I wangled myself into the audience for “Question Time” recently. I submitted the question:
“Labour says it is the party of social democracy. Given that is obviously not true, should Labour change its policies or change its name?”
Unsurprisingly, my question wasn’t chosen.
I am amazed
Shome mishtake, shurely…
I was being ironic…..