From the TUC

The slowest ever recovery slows down again

28 Apr 2015, by in Economics

Quarterly GDP growth is estimated at only 0.3% in 2015 Q1, half the rate of 0.6% seen in both Q3 and Q4 of 2014, and only a third of the 0.9% growth seen a year ago in 2014 Q1.

The median view of commentators was for 0.5%, and 0.3% coincided with the most pessimistic of those asked (see this Reuters piece). On a slightly longer view, 0.3% was the weakest growth since 2012 Q4 (when it was -0.3%).  

Industry figures now show only services making any upward contribution to GDP, albeit greatly reduced from previous quarters (chart below). In growth terms, services slowed to 0.5% from 0.9% in the previous quarter, production to -0.1% from 0.2%, and construction to -1.6% from -2.2%.

GDP quarterly growth, per cent, and contributions by industry, percentage points

gdp2015Q1_1

(NB these figures are drawn from the ONS press release (Table 4) and may not add to the total as they are all rounded to one decimal place.)

The figures suggest an ongoing and indeed now fairly abrupt slowdown, reflecting the unsustainability of building an economy on low wages, weak investment and the reckless stoking of house price inflation. This is a dismal end to a parliament that has seen the slowest recovery on record. And, as our figures earlier this morning showed, a recovery that has been barely felt by households.

The past five years are the only such period on record when average real household disposable incomes fell compared to the previous five years. Normally real incomes rise as prosperity advances. The average growth of real incomes over all previous 5-year periods is 13.8%; over 2010-14, real incomes fell by -0.6%.

Growth of five year average of UK real household disposable income per head

gdp2015Q1_2 

On the basis of OBR projections for even more severe austerity to come, the strong and sustainable growth that will permit good jobs with decent pay and a material recovery in household incomes and spending power remains an increasingly distant prospect. We need a new plan.

5 Responses to The slowest ever recovery slows down again

  1. David Mortimer
    Apr 29th 2015, 9:01 am

    It won’t make any difference which party people vote for as they have all agreed for austerity to continue after the election. I fear a grand coalition being formed which preaches austerity for everyone except themselves while they socially & financially destroy the UK following George Osborne’s austerity policy which hasn’t balanced the budget deficit but it has doubled the national debt.

  2. Ian Linehan
    Apr 29th 2015, 10:59 am

    Thinktanks say that the Tories will have to save £55bn over the next parliment to meet their promise to balance the overall budget. Which is a stark contrast to Labour who will balance the current budget which would require around £4bn and be paid for by taxes on the wealthier in our society. Trying to paint Labour as an austerity party is ridiculous and probably in part ‘tory scaremongering’ the ideological cuts the tories are planning will fail just as they did in the first half of this parliment when George Osborne had to halt his cuts in 2012 sire it feels good when insessant cuts are stopped but as a nobel prize winning economist has said in a recent article i read: “A return to growth after austerity has been put on hold is not at all surprising. As I pointed out recently, if this counts as a policy success, why not try repeatedly hitting yourself in the face for a few minutes? After all, it will feel great when you stop.”

  3. Analysing the reactions to our flagging GDP (a.k.a. the slowest recovery ever getting even slower) – ToUChstone blog
    Apr 29th 2015, 11:59 am

    […] number of themes emerged in the different media commentaries on yesterday’s poor GDP results that are worth further […]

  4. Carol Wilcox
    Apr 29th 2015, 1:50 pm

    It should also be pointed out that growth in the last quarter of the Labour government was 0.6%, followed by 2 quarters of similar growth rates at the beginning of the condem reign (of terror) – by Q4 2010 the rate plunged to -0.4%?

  5. Ten Reasons to Vote – ToUChstone blog
    May 6th 2015, 3:16 pm

    […] The government claims that its economic strategy has been vindicated by a “strong” return to economic growth. We looked into it, and found that it was an incredibly slow recovery. Then we discovered that it’s actually THE slowest recovery since records began. And even worse, it’s gotten slower since then. […]