It's all just a little bit...
Considering where we've been almost ever since the coalition came to power, growth of 0.6% in the last quarter isn't to be sniffed at, especially seeing it's not boosted by one-off factors such as the Olympics. The worry was that we could have slipped into a triple dip recession back in April, only for that low to be narrowly avoided and the double dip itself revised away. Having took no responsibility whatsoever for the economy flat-lining, blaming every factor other than the cuts and the chill the spectre of austerity sent through business confidence, naturally Osborne and the Tories are more than happy to present what is fairly insipid growth historically following a recession as the economy healing.
On the face of it at least, the signs are encouraging. All the main sectors of the economy grew in the last three months, unemployment is coming down, albeit very slowly, and Osborne managed to just about reach his borrowing target, once the Office for Budget Responsibility had revised their estimate. Take a closer look though, and the figures paint a picture of an economy still heavily reliant on the service sector. With wages not keeping pace with inflation, there's eventually going to come a crunch point when those who have so far kept spending cut back.
Despite Osborne continuing to boast about rebalancing the economy, his actual strategy is far less refined. The plan is to boost the one sector that has remained overheated with prices now rising again: the housing market. Desperate for any kind of growth, the danger is of another bubble. If it works for the Tories in the short-term however, helping them win a majority that otherwise looks all but impossible, who cares if it's repeating the same mistakes the coalition castigated Labour for? Except for us nerds, obviously. Oh, and economists. And anyone with any real interest in winning that "global race" the coalition is constantly regaling us about. Still, politics eh?
On the face of it at least, the signs are encouraging. All the main sectors of the economy grew in the last three months, unemployment is coming down, albeit very slowly, and Osborne managed to just about reach his borrowing target, once the Office for Budget Responsibility had revised their estimate. Take a closer look though, and the figures paint a picture of an economy still heavily reliant on the service sector. With wages not keeping pace with inflation, there's eventually going to come a crunch point when those who have so far kept spending cut back.
Despite Osborne continuing to boast about rebalancing the economy, his actual strategy is far less refined. The plan is to boost the one sector that has remained overheated with prices now rising again: the housing market. Desperate for any kind of growth, the danger is of another bubble. If it works for the Tories in the short-term however, helping them win a majority that otherwise looks all but impossible, who cares if it's repeating the same mistakes the coalition castigated Labour for? Except for us nerds, obviously. Oh, and economists. And anyone with any real interest in winning that "global race" the coalition is constantly regaling us about. Still, politics eh?
Labels: Conservative-Liberal Democrat coalition, economic growth, economics, GDP figures, George Osborne, politics, Tories
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