Today’s GDP figures are bad and let’s hope that the fact that we’re officially back in recession makes the government think again. (Some of us have been worrying this was going to happen for a while.) But the precise figure isn’t that important: even if we had had growth of plus 0.2 per cent it wouldn’t have made much difference to the picture of what has happened since the recession:
“Normal” growth for our economy is about 2 – 2.5 per cent a year and coming out of a recession we should be looking for about one percentage point more than that. As Duncan has pointed out, we need economic growth of about 0.2 per cent a quarter just to keep up with population growth: the last year and a half on this chart looks like stagnation but it feels like decline.