The sigh of relief from Number 11 Downing Street could almost be heard throughout the land. Why? The economy has grown all be it by only 0.3%. By the skin of its teeth avoided falling back into recession.
It’s a bit like a dog walking on two legs, not that it does it well but it’s a miracle that it can do it at all. Similarly the economy this 0.3% growth in Gross Domestic Product (GDP) in the first three months of the year is a small blessing for the Chancellor. It allows him to claim that there are encouraging signs in our economy.
The economy by the barest of margins avoided two consecutive quarters of contraction, which of course is the definition of a recession.
Many economists worried that the UK would enter into a triple dip recession this has been avoided but the country’s economy is far from healthy. It has flat lined since the financial crisis of 2008.
Despite these figures the overall state of the economy is still a cause for real concern. The IMF as called on the Osborne to rethink the austerity programme and we’ve been stripped of our triple A credit ratings by two international rating organizations.
A more detailed look at the figures shows that construction activity fell by 2.5% in the quarter, a sector that is a good barometer of the real health of the country.
Although the headline figures will bring some comfort to delegates attending the Welsh Conservative conference in Swansea. It won’t take much of a gift of prophesy to imagine that this small change in fortune will be much trumpeted from the platform that the economy has now turned the corner.
The uncomfortable reality is that the economy as a whole remains 2.6% below its pre-crisis peak and many Welsh households have experienced job losses and a fall in living standards as real pay goes down and benefits are cut. The Office for National Statistics noted that the economy is no bigger now than it was eighteen months ago.
The pain will be around for a while yet, me thinks.