Bad news doesn't have to be surprising
Peter Hoskin 10:30am
I'm still of the mind that Westminster fusses too much about these quarterly growth figures, particularly when parts of the country have been in
economic decline for decades. But there's no doubting that they have the capacity to shift the political mood, both here and around the country. There is something disheartening about the idea that
the economy returned to shrinkage in the final quarter of last year (even if today's preliminary
figure of -0.2 per cent might be revised upwards, or downwards, in due course). You can expect Ed Miliband to make much of it in this afternoon's PMQs.
The politics of the situation are not stacked entirely against George Osborne, though. His major consolation today is that everyone expected this sort of minor contraction. He'd even prepared us for it in his Autumn Statement, and countless other forecasters have warned of a ‘mild recession’ on the back of the crisis in the eurozone. Looking at the polling, people don't appear inclined to stick the boot into Osborne yet. Labour and the bankers are more likely bogeymen.
But support for Chancellors can weaken, particularly if economic problems persist. And there are some numbers behind today's headline figure that should worry Osborne, not least for how they could upset his careful political arguments. Production fell by 1.2 per cent across the quarter, which includes a drop in manufacturing output of 0.9 per cent. After today, the calls for a Plan A+, and a fuller rebalancing, will surely intensify.
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Heartless Curmudgeon
January 25th, 2012 10:52am Report this commentNo problem: the Great Economic Pretender and his sidekick would merely lie, confabulate, prevaricate, and prove that loss was gain and vv, - and stooges and feckless idiots in all parties, - together with the 'informed' commentariat would sagely nod their heads and walk away in agreement.
Little Oz has much to learn to be up on that game.
oldtimer
January 25th, 2012 12:00pm Report this commentGovernment spending accounted for +0.4% of the reported growth so the rest of the economy is down -0.6%. It is difficult to see why things should pick up on present tax policies plus the insidious extra costs of government energy policies, estimated to add c£330pa per household ad infinitum. Absurdly, these policies fail to achieve their supposed aim of reducing CO2. More evidence of chumps in charge.
Charlie the Chump
January 25th, 2012 12:09pm Report this commenti don't like Osborne and I'm concerned that his dual chancellor/political strategist role diminishes his effectiveness both ways.
But he is right to talk tough on sorting the Labour created mess (even though debt still soars) and there is much more to do, the desperate state of the UK economy possibly taking 10 years to sort out (hopefully soon without the Libs).
But before we let the news depress us there is some good news on the Telegraph rolling Davos blog this morning:
"UK CBI January factory orders index rises to four-month high. Manufacturing output expectation balance +15 this month (highest since May 2011), versus -8 in December".
Never make the mistake of looking only at one month or one quarter alone.
Bickers
January 25th, 2012 12:51pm Report this commentThere are five fundamental problems that need fixing:
1. The deficit and debt left by NuLieBore
2. The red tape and punitive taxes that are a disincentive to business investment and growth
3. The size & cost of the State
4. The Eurozone catastrophe and our need to increase trade with the rest of the World
5. Membership of the EU
Until these problems are addressed with determination our economy will continue to bounce along the bottom and be out performed by our competitors, a disaster in the medium to long term.
Sir Everard Digby
January 25th, 2012 1:31pm Report this commentThe problem is that all Westminster does is 'fuss' Osborne/Brown/Milliband do not seem to grasp the blindingly obvious - raising taxes stifle growth. Red tape is a disincentive to entrepreneurs. Our society rewards the wrong behaviour,whether it be fast-track bankruptcies,IVAs,those addicted to credit,those addicted to benefits. It provides no incentive to work hard and better yourself through your own efforts. If you do, your wealth will be recycled to benefit someone else.
Saving for the future? Let's inflate away the value of your savings.
Hit by high energy costs? Let's increase VAT on fuel and ramp up green energy taxes.
None of this can work,yet on they go. Why is anyone surprised that the political classes are an absolute failure at anything except politics. It's the only job going where you only have to pretend to do something.
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