The
Britain's economy is going "Gangbusters" ... Really?
The
Britain's economy is going "Gangbusters" the UK's statistics office has said. Britain has escaped recession. The Office for National Statistics (ONS) hailed the performance of the economy. Gross domestic product (GDP) expanded by 0.6pc in the first quarter of 2024. (Quarter on Quarter).
ONS chief economist Grant Fitzner said: "To paraphrase the former Australian Prime Minister Paul Keating, you could say the economy is going gangbusters."
Chancellor Jeremy Hunt said: "Today's growth figures are proof that the economy is returning to full health for the first time since the pandemic."
Really? There is a strange statement in the Bank of England's Agent survey of business conditions which should serve as a warning.
"Subdued consumer demand is widespread across the retail and service sectors. While some of the weakness in spending in 2024 Q1 was owed to poor weather, there is also a sense that underlying demand has weakened, although contacts are unsure as to the reason."
Demand has weakened, subdued demand is widespread and businesses are not quite sure why! Hardly an economy that is "going gangbusters". More like an economy subject to political "Gaslighting" as Rachel Reeves suggests.
Dig into the detail of the GDP figures for the first quarter, growth year on year was up by just 0.2%. Service sector inflation was up by 0.3% boosted by public sector growth of over 2% in defence, social security, education, health and social work.
In private sector services,, output fell by -0.4% with significant drops in accommodation, food, transport, storage, finance and insurance. The leisure sector continues to suffer for the fourth quarter in succession. Retail trade sectors have been in negative territory for seven quarters with a slight uptick in Q1.
The construction sector contracted for the second consecutive quarter by -0.6%. (Manufacturing the hero sector up 2.1% in the first quarter).
Jeremy Hunt, the chancellor, told Times
Radio that the figures were “more positive than many people have perhaps
been thinking”. Rishi Sunak said the economy had “turned a corner”.
Demand
has weakened, subdued demand is widespread and businesses are not quite
sure why! Hardly an economy that is "going gangbusters". More like an
economy subject to political "Gaslighting as Rachel Reeves suggests.
"Gangbusters by Gaslight" our theme for the week.
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