Wednesday, 25 July 2012
No growth area
The economy is still in deep trouble. Just published are the official figures by the Office for National Statistics that show that the economy has shrunk for the third quarter in a row. The economy shrank by 0.7% in the last three months.
This shrinkage is much larger than most economist’s were expecting. Most thought the figure would be nearer 0.2%.
This follows a drop of 0.3% in the first three months of the year.
It is traditional to find a scapegoat for such disastrous figures and true to form thy’ve done it again. This time it’s the Queen. The fact is we’ve all taken time off to celebrate her jubilee. Naughty us. And of course that perennial stand-by the weather. It rained.
The biggest fall was in the construction industry. The building sector saw output fall by 5.2%. But manufacturing was also down by 1.3%, while services was down 0.1%.
Looking at the figures it is very unlikely that we'll be on the right side of zero growth this year. It is more likely the economy will be contracting.
These figure again underline that the coalition governments handling of the economy is proving disastrous. All reputable economists will say you don’t go for a policy of public expenditure cuts in a recession. The time to cut back is when the economy is growing.
The government is repeating the mistakes that occurred in the Inter war years of last century. Are lessons never learnt from history?
The UK is now in the worse double dip recession for fifty years and still our Chancellor has no plan B.