There has been a lot of fuss in the media about the UK economy's return to rapid growth. We are told that the UK is experiencing one of the highest rates of growth of any country in the OECD. The Coalition is spinning this as evidence that Austerity has worked.
Yesterday the ONS published a chart which I think puts these claims into context:
Its own description of the UK post-2008 performance is worth quoting in full:
The subsequent economic recovery has been the slowest in post-war history and has also been one of the weakest in the G7 (Figure 1). UK real GDP increased by just 1.2% per annum between 2009 and 2013, the third lowest rate in the G7, and remains 0.6% below its pre-downturn peak while all other major economies have surpassed this milestone, with the exception of Italy.
The UK economy has grown a measly 6% from it's recessionary low. The US, Canada, Germany and even Japan, have grown by more than 10%. The US economy is now some 7% bigger than it was at the start of the Great Recession, while we are still smaller. Surely the question to the Coalition is not, 'How have you managed to generate such stellar performance since 2013?', but 'Why has the economy performed so badly, by comparison to others, since 2010?'
So when you hear the next story about the UK's economic turnaround, have another look at the chart.
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