The slowest ever recovery slows down again
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
(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
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.