UK economic growth almost double the expected

Berberis · 23-07-2010, 13:04

It has been released today that the UK's economic growth was 1.1% for the second quarter of the year (April-June). Will this sudden increase in economic growth silence the neigh says who have predicted doom and gloom for the UK economy under the control of the coalition government?

Probably not, but it does show a stark contrast compared to the last growth figures for the period, Jan - March, under a Labour government which saw a paltry 0.3% growth.

Ref: http://www.bbc.co.uk/news/business-10737352

Blackbeard · 23-07-2010, 13:11

Quote:

Originally Posted by serapis

It has been released today that the UK's economic growth was 1.1% for the second quarter of the year (April-June). Will this sudden increase in economic growth silence the neigh says who have predicted doom and gloom for the UK economy under the control of the coalition government?

Probably not, but it does show a stark contrast compared to the last growth figures for the period, Jan - March, under a Labour government which saw a paltry 0.3% growth.

Ref: http://www.bbc.co.uk/news/business-10737352

Just check the dates, I think you will find that the "new" government only got in in May and have done very little to stimulate the market. If you look at the FTSE 100 you will see that the market fell when the "new" government got in and has still not quite recovered.
http://news.bbc.co.uk/news/business/...hree_month.stm

Tomataheeed · 23-07-2010, 13:12

Whatever your political persuasion, the Tories can't take the credit for improved growth just a few weeks after coming into office. Everything that happens with the economy for the next few months...good and bad is down to Labour. I'm guessing, but it must take 12-18 months for government action to filter down to GDP figures....

HeadingNorth · 23-07-2010, 13:13

Not to mention that this figure will be revised - upwards or downwards - at least twice before we know if it's accurate.

It might give the lie to anyone who was predicting that the new Tory/Liberal government would cause an instant and total economic meltdown, but it certainly does not prove that the new government is doing any good.

Funky_Gibbon · 23-07-2010, 13:19

Quote:

Originally Posted by Blackbeard

Just check the dates, I think you will find that the "new" government only got in in May and have done very little to stimulate the market. If you look at the FTSE 100 you will see that the market fell when the "new" government got in and has still not quite recovered.
http://news.bbc.co.uk/news/business/...hree_month.stm

Not to mention they didn't have their 'Emergency Budget' until the 22nd June. Trying to pretend these figures are due to the new government is laughable.

Quote:

Originally Posted by HeadingNorth

It might give the lie to anyone who was predicting that the new Tory/Liberal government would cause an instant and total economic meltdown, but it certainly does not prove that the new government is doing any good.

Right now we're still largely operating under the economic policies left by the last government. We won't know what effect the current governments policies will have until they come into effect. However 0.4% of the 1.1% growth figure comes from the construction industry and that isn't likely to improve once the cancellation of the school building programme is factored in in future quarters.

HeadingNorth · 23-07-2010, 13:25

Quote:

Originally Posted by Funky_Gibbon

Right now we're still largely operating under the economic policies left by the last government. We won't know what effect the current governments policies will have until they come into effect.

Indeed. That was, basically, what I just said.

Grandad.Malky · 23-07-2010, 13:25

Quote:

Originally Posted by serapis

It has been released today that the UK's economic growth was 1.1% for the second quarter of the year (April-June). Will this sudden increase in economic growth silence the neigh says who have predicted doom and gloom for the UK economy under the control of the coalition government?

They won’t have unpacked half their boxes in their offices yet and they have turned the economy around ………….. nice one.

Alex C. · 23-07-2010, 13:26

Labour forecast in their March budget that the economy would grow 1.5% this year. If these figures aren't revised downwards, then we'd have to grow by just 0.1% for the remaining 6 months of the year to meet the forecast.

Berberis · 23-07-2010, 13:29

Quote:

Originally Posted by Funky_Gibbon

Not to mention they didn't have their 'Emergency Budget' until the 22nd June. Trying to pretend these figures are due to the new government is laughable.

So you’re saying that the few Labour fans here did not predict a downturn in the economy the day after Labours defeat? Trying to ignore that fact is laughable.

HeadingNorth · 23-07-2010, 13:31

Quote:

Originally Posted by serapis

So you’re saying that the few Labour fans here did not predict a downturn in the economy the day after Labours defeat? Trying to ignore that fact is laughable.

He is not claiming that nobody made that prediction. On the other hand, nor are you claiming that these figures are to the credit of the new government, so you are accusing each other of things that were not said.

These figures prove that the election of a (largely) Tory government does not lead to instant and total collapse. They prove nothing else, because the new government hasn't had time to have an effect on anything yet.

Grandad.Malky · 23-07-2010, 13:33

Quote:

Originally Posted by serapis

Trying to ignore that fact is laughable.

Not as laughable as claiming to have turned things around before the ink is dry on any documents they may have signed since they sneaked into power,

Alex C. · 23-07-2010, 13:35

Quote:

Originally Posted by serapis

So you’re saying that the few Labour fans here did not predict a downturn in the economy the day after Labours defeat? Trying to ignore that fact is laughable.

As pointed out above, 0.4% of the increase is down to the construction industry. Can you really see the industry not contracting (or stalling) with the cancellation of the BSF programme?

These types of fiscal change will take time to filter through to the figures, and ti will be at least 3rd or 4th quarter before we can look at the figures and say 'well some of this is down to the new government'.

I very much doubt anyone expected a downturn to start the day the government got into office - and particularly when these figures include over a month of a labour government!

Berberis · 23-07-2010, 13:39

Quote:

Originally Posted by Malky

Not as laughable as claiming to have turned things around before the ink is dry on any documents they may have signed since they sneaked into power,

I claimed nothing of the sort in actual fact.

Berberis · 23-07-2010, 13:42

Quote:

Originally Posted by Alex C.

As pointed out above, 0.4% of the increase is down to the construction industry. Can you really see the industry not contracting (or stalling) with the cancellation of the BSF programme?

Back in late 2008 and early 2009, spending on government building projects almost entirely dried up anyway and that’s the state of play today.

I know what happened as I was working in that industry and was made redundant because of it.

Alex C. · 23-07-2010, 13:57

Quote:

Originally Posted by serapis

Back in late 2008 and early 2009, spending on government building projects almost entirely dried up anyway and that’s the state of play today.

I know what happened as I was working in that industry and was made redundant because of it.

I'm not disputing any of that - I'm not one of the posters who only posts in support of Labour.

What I'm saying is that the effects of the cancellation of the BSF programme will definitely hit the GDP figures.

The cancellations are worth:

£12bn in 2010 & £22bn in 2011*

If the growth then falls due to a fall in the construction sector, you could probably look at the figures and infer it was due to the new governments fiscal policies.

* which seems like a lot more than was announced, so I'm not taking these as gospel

Treatment · 23-07-2010, 14:00

IF this is accurate it shows an alarming variance from what was forecast, thus casting considerable doubt as to the veracity of those forecasting.

Grandad.Malky · 23-07-2010, 14:09

Quote:

Originally Posted by serapis

I claimed nothing of the sort in actual fact.

My apologies but what are we to read into this statement.

Quote:

Will this sudden increase in economic growth silence the neigh says

Alex C. · 23-07-2010, 14:10

Quote:

Originally Posted by Treatment

IF this is accurate it shows an alarming variance from what was forecast, thus casting considerable doubt as to the veracity of those forecasting.

Indeed, the OBR have forecast 1.2% for the whole of 2010. 6 months in and they're already wrong. Unless the government intends us to contract 0.2% for the remainder of the year

Longcol · 23-07-2010, 14:13

Quote:

Originally Posted by serapis

Back in late 2008 and early 2009, spending on government building projects almost entirely dried up anyway and that’s the state of play today.

I know what happened as I was working in that industry and was made redundant because of it.

Hopefully not as an economist.

andyofborg · 23-07-2010, 17:41

Quote:

Originally Posted by Alex C.

As pointed out above, 0.4% of the increase is down to the construction industry. Can you really see the industry not contracting (or stalling) with the cancellation of the BSF programme?

much of the 0.4% from the construction industry is a result of work which wasn't done earlier in the year due to the weather being done over the last couple of months