Dreadful GDP figures show one of the largest quarterly falls on record
In late November the Chancellor was confident that the economy was moving towards ‘sustainable growth‘, an argument that it will be hard to make after today’s figures. The drop in quarterly GDP growth is 1.2 percentage points, equivalent to the largest drop that we saw during the recent recession (where quarterly growth fell from -0.9 to -2.1 between Q3 and Q4 of 2008) and during last quarter every sector of the economy bar production was shrinking. Although ONS concludes that the bad weather may have contributed to the fall they estimate that the snow is only responsible for around 0.5 per cent of the quarterly GDP reduction – and that had there been no disruption GDP would be ‘flattish’. This would still leave us with a drop of 0.7 points and an extremely worrying economic outlook.
You can read our General Secretary Brendan Barber’s reaction to today’s statistics here.