Still Bumping Along the Bottom

So the first estimate of the country’s Gross Domestic Product change in the first quarter of this year turned out to be  an increase of 0.3%. While this result is better than the 0.3% decline in GDP seen in the previous quarter, it merely brings us back to where we were six months ago - and indeed to about where the economy was 18 months ago. Flatlining or bumping along the bottom however you choose to put it.
But this small measure of growth is actually quite an achievement for the struggling economy (subject to any later revisions of this initial estimate) given the suffocating austerity imposed by the Government and the senseless policy that it undertook of cutting back on public investment. But what exactly is it that’s been growing? This is the question that I and others kept asking, to no avail, during the pre bust years, and we know how that turned out.
Mostly some kinds of ‘services’ fluffing up again I suspect - with a much more modest performance from manufacturing and other useful industry. There’s a limit to how much of each other’s washing we can keep taking in, or pay day loans that can be issued, or imported goods that can be moved through shops. So much for re-balancing the economy.
I trust that the Chancellor of the Exchequer is a reader of the Financial Times – a newspaper that’s not renowned for its left-of-centre credentials. In the recent weekend edition of the FT Mr Osborne would have seen articles with headlines such as: “Spending cuts hold back US growth”, “Spain – another year of recession” “US – the cuts begin to bite” and of course “United Kingdom – bumping along the bottom”.
Will the Chancellor take heed of these informed views on how real world rather than right wing textbook economies respond to cuts in hard times? I doubt it. But perhaps the impending visitation from the International Monetary Fund, that not-so-radical crew who recently downgraded their forecasts for UK economic growth for both this year and next will be more influential.
And if not the IMF, then perhaps Mr Osborne will feel obliged to take heed of the electorate’s views as reflected in the results of Thursday’s County and Unitary Council elections with a couple of mayoral contests and a parliamentary by-election to boot.
But I strongly suspect that any adverse outcomes in the realm of the much-despised Local Government will be rationalised away and the only views that count will be those of his political confederates. An increasing number of these chums seem to be getting impatient with their own likely electoral fortunes that are also, not surprisingly, still bumping along the bottom.
Such, alas, is the nature of what matters to government in Britain today with the consequences that all but the richest individuals and tax-dodging companies are experiencing.