Economic growth is half what was predicted and is the slowest quarterly growth for two years.
According to the Office for National Statistics the economy grew by 0.3% in the first quarter the year.
Compared with 0.6% in the last three months of 2014 and 0.7% three months earlier the figures are disappointing and are a serious setback to the Conservative claims that they’ve turned around the economy.
Even the Chancellor, George Osborne had to admit, “we have reached a critical moment. Today is a reminder that you can’t take the recovery for granted.”
Quick to point out that all is not well with the economy Labour’s Ed Balls said: “While the Tories have spent months patting themselves on the back these figures show they have not fixed the economy for working families.”
It certainly helps Labour with only nine days to go before the general election, that these figures show that all is not as rosy as the Tories would like the voters to believe.
Despite the huge boost from lower oil prices to consumer spending and the transport sector, the economy would seemingly be heading back into recession.
As this almanac mentioned last week much of the boom of last year was based on artificial increase in house prices based on cash thrown at the help to buy scheme.
Now that the property market has cooled so has the economy.
Today’s news sees another wheel come off the Conservative election strategy.
They first targeted Miliband as weak but he defied their portrait of him. And it was Cameron that was seen as chicken in not debating with Miliband.
Bad economic news
Now another wheel comes off with the bad economic news.
In opinion polls the Tories have always led on economic competence. It hasn’t given them the traction they hoped it would. But they thought that it might swing undecided voters at the last minute. Well, today’s news has undermined that strategy.
Apart from a budget deficit of 5% of national income the UK has a balance of payments deficit of 5.5% of national income. Top that up with much lower productivity than other competitive countries and you have an economy that’s in a mess.
Some economists have described the UK economy as “a ticking time bomb waiting to explode after the election.”
For people to believe in economic competence they have to feel it in their pockets. Not many voters do. Today’s news on the growth just adds to their disbelief in what Cameron and Osborne are telling them.