The political implications of today’s growth numbers are complex. On one level, a contraction in the economy should provide Miliband and Balls with an opportunity to make their economic case against the government. Indeed, Balls is already out with a statement calling the GDP figures a ‘damning indictment of David Cameron and George Osborne’s failed economic plan’. I suspect that Miliband is also looking forward to PMQs rather more than normal.
But on the other hand, as long as Cameron and Osborne enjoy a big lead on the economy — 18 points in the last ICM survey —
bad economic news will reinforce voters’ tendency to stick close to nurse for fear of something worse. Focus groups also suggest that the public are viewing the economy here in the context of
the wider problems across Europe.
One Downing Street source remarked to me earlier this week that he thought from today until the Budget, the economy and the Eurozone would again dominate the political news agenda. Indeed, I
suspect that Greece’s failure to agree a deal with its creditors will rise up the news agenda in
the coming days and weeks as people digest the implications of it.