The UK Recovery in International Comparison
Today’s European GDP figures provide a stark reminder of how weak the UK recovery has become. German GDP is now back above its pre-crisis level, a feat the UK is not forecast to match until 2013.
The graph below vividly illustrates how the UK has fallen into the international slow lane in the past six months. We are now right at the bottom with Portugal and Greece, and behind Spain.
By contrast, in the six months before this (and before Osborne’s measures started to take effect) the UK was near the top of table.
As I said on Wednesday as the Bank of England downgraded it’s 2011 growth forecast, potentially adding another £12-14bn to the deficit, without growth there can be no credible deficit reduction.
It will be interesting to see what happens to German and French growth when Greece defaults because as I understand it their banks are right in the firing line of that one.
Hi Duncan,
Thanks for posting this, I tweeted asking which other major economies had six months of no growth.
One thing though, Hamish McRae in the Indy today says you can’t blame the govt too much on growth as the cuts haven’t properly kicked in yet, but my impression is we’ve had £6billion worth of cuts and seen the economy talked down for a year which has affected confidence, but how much could this affect growth and what would it have been like under labour?
Any thoughts?
Yes – collapse in business & consumer confidence driven by all the tough talk has certainly had an effect.
I prefer it when you talk about Star Trek.
ONS’s growth report for Q1 showed government spending as one of the main contributors to growth. So I’m not sure we can say cuts are shrinking the economy yet but they certainly will do sooner or later. The tough talk may have dented confidence but there a few other factors that have probably had a bigger impact not least prices.
[...] so hard and so fast, we would be in the same boat as Greece and Portugal. As Duncan Weldon’s blog reveals, actually it’s because the coalition chose to cut so deep and so fast that we are now [...]
[...] threat of recession just to try and prevent cuts for ideological reasons. And as he pointed out in a follow-up post, evidence that the UK’s recovery is slowing is abundant. In the second and third quarters of [...]
[...] threat of recession just to try and prevent cuts for ideological reasons. And as he pointed out in a follow-up post, evidence that the UK’s recovery is slowing is abundant. In the second and third quarters of [...]