Growth revision shows economic recovery is off track

Revisions to the national accounts data published by the ONS just before Christmas show economic recovery in the UK was stronger in 2010 than previously thought.

 

Revisions to the national accounts data published by the Office for National Statistics just before Christmas show economic recovery in the UK was stronger in 2010 than previously thought.

It is quite common for the statisticians to discover extra growth in the economy in the first year of recovery – in part because they find it hard to pick up the expansion of new businesses – and this repeats the usual pattern.

The new figures show GDP growth in the whole of 2010 was 2.1% – significantly higher than the initial 1.4% estimate.

What is most interesting though is that, according to these figures, the recovery from the 2008/09 recession proceeded at the same pace for five quarters – that is from Q3 2009 to Q3 2010 – as did the recovery from the two previous recessions (those of the early 1980s and early 1990s).

At this point in the current recovery real GDP was 3.2% higher than at its lowest point, compared to 3.1% in the 1980s and 3.0% in the 1990s. This might be judged a little disappointing, given that the 2008/09 recession was deeper than the previous two, but since then things have got worse.

While the economy recorded growth of 2.7% in the following year of the 1980s recovery and 4.8% in the following year of the 1990s recovery, growth in the UK over the last year has been just 0.5%.

And if forecasts from the Office for Budget Responsibility are right and the economy does not grow at all the final quarter of 2011 and the first of 2012, then this recovery is going to lag further behind the previous two (Graph 1 below includes OBR forecasts for the period Q4 2011 to Q4 2012).

Graph 1:

UK-recoveries
It would be wrong to be too gloomy. History suggests the statisticians might find some more growth in 2011 too. But this is shaping up to be the slowest recovery in the UK in the post-war period.

See also:

Glasman is battling over postage stamps, but growth is the priorityCormac Hollingsworth, January 9th 2012

Manufacturers still fear a double-dip recession in 2012Tony Burke, December 23rd 2011

The south is on its way out of recession, but the north is stuckLewis Goodall, December 15th 2011

Unemployment: Plan A isn’t workingRichard Exell, December 14th 2011

Grim economic news II: OECD cut UK growth prediction. AgainAlex Hern, December 13th 2011

31 Responses to “Growth revision shows economic recovery is off track”

  1. Anonymous

    Still below the long term cost of borrowing. That’s CPI for most of government debts.

    Bonkers business. Borrowing to spend/invest, and getting a return less than the cost of borrowing.

    So with a 7,000 bn debt linked to CPI, plus a deficit, the real debt is going up 500 bn this year.

    Government ‘income’ 550 bn.

    It’s going all Greek.

    End result is the people you profess to want to help are going to get shafted. Really shafted.

  2. Anonymous

    Still below the long term cost of borrowing. That’s CPI for most of government debts.

    Bonkers business. Borrowing to spend/invest, and getting a return less than the cost of borrowing.

    So with a 7,000 bn debt linked to CPI, plus a deficit, the real debt is going up 500 bn this year.

    Government ‘income’ 550 bn.

    It’s going all Greek.

    End result is the people you profess to want to help are going to get shafted. Really shafted.

  3. Alex Braithwaite

    RT @leftfootfwd: Growth revision shows economic recovery is off track //t.co/CJJhqeop

  4. Anonymous

    It would be wrong to be too gloomy. History suggests the statisticians might find some more growth in 2011 too. But this is shaping up to be the slowest recovery in the UK in the post-war period.

    ==========

    Not surprising is it.

    1. Banking. Banking crisis take quite a while to recover

    2. Banking. It’s not a UK specific crisis. It’s more wide spread. Look at Sweden and its banking mess and how long it took to recover.

    3. The current mess isn’t a banking issue. It’s about governments spending too much and having massive debts.

    You need to face up to the size of the UK government’s debt nightmare.

  5. Anonymous

    It would be wrong to be too gloomy. History suggests the statisticians might find some more growth in 2011 too. But this is shaping up to be the slowest recovery in the UK in the post-war period.

    ==========

    Not surprising is it.

    1. Banking. Banking crisis take quite a while to recover

    2. Banking. It’s not a UK specific crisis. It’s more wide spread. Look at Sweden and its banking mess and how long it took to recover.

    3. The current mess isn’t a banking issue. It’s about governments spending too much and having massive debts.

    You need to face up to the size of the UK government’s debt nightmare.

  6. Patron Press - #P2

    #UK : Growth revision shows economic recovery is off track //t.co/7tgtI3Uo

  7. #OWS - 99% Amplified

    #UK : Growth revision shows economic recovery is off track //t.co/7tgtI3Uo

  8. leftlinks

    Left Foot Forward – Growth revision shows economic recovery is off track //t.co/7n7Ad9CY

  9. ogrmi

    #UK : Growth revision shows economic recovery is off track //t.co/7tgtI3Uo

  10. Len Arthur

    Growth revision shows economic recovery is off track: //t.co/3PXSzSKs writes @IPPR’s Tony Dolphin

  11. B Rawsthorn

    Growth revision shows economic recovery is off track: //t.co/3PXSzSKs writes @IPPR’s Tony Dolphin

  12. Michael

    Growth revision shows economic recovery is off track – //t.co/0qQw02un

  13. Brian Moylan

    RT @TheRightArticle: Growth revision shows economic recovery is off track – //t.co/AukvTmeX

  14. Newsbot9

    Too gloomy? Your party has killed the recovery. Dead. This is nothing to do with debt, it’s to do with their deliberate attack on consumer confidence for your 1%’s benefit.

  15. Newsbot9

    Too gloomy? Your party has killed the recovery. Dead. This is nothing to do with debt, it’s to do with their deliberate attack on consumer confidence for your 1%’s benefit.

  16. Newsbot9

    End? The “government” is shafting them now to give more welfare to the 1%. It’s easing up on them at the same time as it’s punishing the poor for existing. While you stand and cheer.

  17. Newsbot9

    End? The “government” is shafting them now to give more welfare to the 1%. It’s easing up on them at the same time as it’s punishing the poor for existing. While you stand and cheer.

  18. Lord Blagger

    There won’t be a recovery. The Tories can’t engineer one. They are just carrying on spending.

    So the debts going to escalate, and when lenders decided that they won’t lend any more, then the following will happen.

    1. Massive cuts hit the people you think you want to help – (The 170K a year benefit claimants)

    2. That will work its way down to those that need the help, but because the debt is there they won’t get it.

    3. Then they will start on pensioners. It’s the largest debt. It’s already started. RPI to CPI. CPI to level. Then caps. Then freezing and means testing of the state pension

    That’s the consequence of 7,000 bn of debt.

    Just as there are now complaints here about debt forgiveness to the 3rd world, future generations in the UK don’t get that option.

    They will just say, taxation for services, no taxation for debts.

  19. Lord Blagger

    There won’t be a recovery. The Tories can’t engineer one. They are just carrying on spending.

    So the debts going to escalate, and when lenders decided that they won’t lend any more, then the following will happen.

    1. Massive cuts hit the people you think you want to help – (The 170K a year benefit claimants)

    2. That will work its way down to those that need the help, but because the debt is there they won’t get it.

    3. Then they will start on pensioners. It’s the largest debt. It’s already started. RPI to CPI. CPI to level. Then caps. Then freezing and means testing of the state pension

    That’s the consequence of 7,000 bn of debt.

    Just as there are now complaints here about debt forgiveness to the 3rd world, future generations in the UK don’t get that option.

    They will just say, taxation for services, no taxation for debts.

  20. Anonymous

    Ah how reassuring, the security troll is here.
    Wouldn’t be a left wing space without a nice cosy right wing troll.
    All is right (or left) with the internet world.
    Someone throw him a bun.

  21. Anonymous

    Ah how reassuring, the security troll is here.
    Wouldn’t be a left wing space without a nice cosy right wing troll.
    All is right (or left) with the internet world.
    Someone throw him a bun.

  22. Lord Blagger

    They are pulling any welfare from the rich.

    It will carry on.

    So you will find that the rich have to pay for the NHS directly as well as via NI (MPs excepted and NHS staff. It looks after its own).

    Before that the state pension will be pulled from the prudent with savings. Civil servants don’t have a fund so they will be exempted.

    What Brown didn’t do was shaft the bankers by bankrupting the stupid. What a plonker.

  23. Lord Blagger

    They are pulling any welfare from the rich.

    It will carry on.

    So you will find that the rich have to pay for the NHS directly as well as via NI (MPs excepted and NHS staff. It looks after its own).

    Before that the state pension will be pulled from the prudent with savings. Civil servants don’t have a fund so they will be exempted.

    What Brown didn’t do was shaft the bankers by bankrupting the stupid. What a plonker.

  24. Lord Blagger

    You can’t even tolerate the debt issue can you?

    The Tories aren’t going to change it. They are going to financially rape and pillage whilst in power, just like Blair.

    He’s as bad as the worst of them. Look at his earnings in his companies and how little tax they pay.

    Labour – scum
    Tories – scum
    Lib Dems – scum

    [Look at Huhne, and his little scams over ‘Green’ power. Screwing the poor to pay for his benefit]

  25. Lord Blagger

    You can’t even tolerate the debt issue can you?

    The Tories aren’t going to change it. They are going to financially rape and pillage whilst in power, just like Blair.

    He’s as bad as the worst of them. Look at his earnings in his companies and how little tax they pay.

    Labour – scum
    Tories – scum
    Lib Dems – scum

    [Look at Huhne, and his little scams over ‘Green’ power. Screwing the poor to pay for his benefit]

  26. Politiconomic

    $$ Growth revision shows economic recovery is off track | Left Foot …: Revisions to the national accounts data… //t.co/a6nYIcDD

  27. Look Left – Wonga’s student ‘scam’ comes unstuck | Left Foot Forward

    […] Tony Dolphin explained how the growth revision shows the economic recovery is “off track”: “It would be […]

  28. Balls throws down the gauntlet: “We are going to have keep all these cuts” | Left Foot Forward

    […] Growth revision shows economic recovery is off track – Tony Dolphin, January 9th 2012 Share | Permalink | Comments: […]

  29. Busting the means testing myth | Left Foot Forward

    […] also: • Growth revision shows economic recovery is off track – Tony Dolphin, January 9th […]

  30. US grew almost twice as fast as UK in 2011 | Left Foot Forward

    […] Growth revision shows economic recovery is off track – Tony Dolphin, January 9th […]

  31. Excuses, excuses, excuses: The Eurozone crisis, weakness in the US, or the wrong type of snow? | Left Foot Forward

    […] also: • Growth revision shows economic recovery is off track – Tony Dolphin, January 9th […]

Leave a Reply