UK Economy Bounces Back

Inflation in the US is currently 7.5%.

Whilst welcome, the figures do not tell the whole story. The growth numbers are pumped up because the United Kingdom endured the deepest recession of any major developed economy in 2020 and its worst performance since 1921, providing a lower base for subsequent comparison. also doesn't reflect what happened in the final three months of last year. UK GDP expanded 1% in the fourth quarter, according to ONS data published Friday. That trailed the United States (1.7%) and Canada (1.6%), which are both in the G7.
Even those statistics obscure a larger truth: the United Kingdom is hurtling toward its worst cost of living crisis in 30 years, the Bank of England expects unemployment to rise next year and growth to be "subdued," taxes are going up and new post-Brexit import controls could slam foreign trade.

A better way to measure performance is to compare current economic output with levels before the pandemic arrived. Here, the United Kingdom is languishing near the middle of the G7 ranking.

Johnson may be able to repeat his G7 claim without being slapped down by fact checkers. But it's less likely to land well with the British people, whose average disposable incomes after tax are forecast to decline by 2% this year.

The cost of living crisis is about to get much worse.

Oh! Meant to say with thanks to CNN

Well, thanks Whitewavemark2, for adding the inevitable political bias. I love the phrase 'languishing near the middle of the G7 ranking'!

Inflation is an issue for many countries and not surprising after the monetary ease and disruption caused by the pandemic. It is touching that people give so much credence to economic forecasters when, often enough, they get it wrong. I seem to recall the Bank of England saying not so long ago the the rise in inflation was temporary, caused by supply disruption.

I suspect inflation will get worse before I gets better and, if the 1970's is a guide, last longer and be harder to eradicate than people expect. That's not a forecast, just a fear.

Maybe growth in energy company dividends and Russian money laundering covers up what the growth in the economy really means for the average person.

Cunco

Well, thanks Whitewavemark2, for adding the inevitable political bias. I love the phrase 'languishing near the middle of the G7 ranking'!

Inflation is an issue for many countries and not surprising after the monetary ease and disruption caused by the pandemic. It is touching that people give so much credence to economic forecasters when, often enough, they get it wrong. I seem to recall the Bank of England saying not so long ago the the rise in inflation was temporary, caused by supply disruption.

I suspect inflation will get worse before I gets better and, if the 1970's is a guide, last longer and be harder to eradicate than people expect. That's not a forecast, just a fear.

Sorry what political bias?

But inflation hits the person in the street much harder than the wealthy who benefit most from economic “growth”.

Thanks Cunco for a reasoned post. Which won’t of course be welcomed by some on here. Doomsters and glum buckets who will jump in to denigrate the UK. The same punters who cried that Sterling was going to tank after the referendum result. WRONG‼️ The pound is exchanging at €1.19 today. Long may it continue.

"Sorry, what political bias?"

Excellent posts Cunco and Urm.

Urmstongran

Thanks Cunco for a reasoned post. Which won’t of course be welcomed by some on here. Doomsters and glum buckets who will jump in to denigrate the UK. The same punters who cried that Sterling was going to tank after the referendum result. WRONG‼️ The pound is exchanging at €1.19 today. Long may it continue.

Not if you're trying to export to the Eurozone from the UK.

I welcome any positive news regarding the U.K. economy.

growstuff

Urmstongran

Thanks Cunco for a reasoned post. Which won’t of course be welcomed by some on here. Doomsters and glum buckets who will jump in to denigrate the UK. The same punters who cried that Sterling was going to tank after the referendum result. WRONG‼️ The pound is exchanging at €1.19 today. Long may it continue.

Not if you're trying to export to the Eurozone from the UK.

Good for folks importing from the Eurozone though…

Thank you cunco, great positive news.

GrannyGravy13

growstuff

Urmstongran

Thanks Cunco for a reasoned post. Which won’t of course be welcomed by some on here. Doomsters and glum buckets who will jump in to denigrate the UK. The same punters who cried that Sterling was going to tank after the referendum result. WRONG‼️ The pound is exchanging at €1.19 today. Long may it continue.

Not if you're trying to export to the Eurozone from the UK.

Good for folks importing from the Eurozone though…

Agreed, but the country already has a balance of trade deficit. We need to export more.

From the Business section today in the Telegraph:

“Market traders are betting that interest rates will hit 2pc by the end of the year after the economy outstripped every other G7 nation to grow at its fastest pace since the Second World War.”

But economic growth hardly benefits anybody and interest rate increases will adversely affect those with mortgages. Economic growth increases with rising prices. It's not a good thing for the majority of people, unless managed well.

Whichever way the doom and gloom brigade like to twist it, this is good news.
Yes I do accept that the economy took a dive previously which we need to bear in mind, but we are on an upward trend, and that can’t be denied.

A more realistic assessment from ONS director of economic statistics Darren Morgan:

“The growth in 2021 comes from a low base in 2020, when the economy fell sharply," Mr Morgan said. "And if you look at where the UK economy is now, compared to its pre-pandemic level, which I know a lot of people do for a broader picture of the economy, the UK is middle of the pack, compared with the G7."

JenniferEccles

Whichever way the doom and gloom brigade like to twist it, this is good news.
Yes I do accept that the economy took a dive previously which we need to bear in mind, but we are on an upward trend, and that can’t be denied.

No, it's not good news for the majority of people.

The ONS's own summary is interesting:

"The largest contributors to this quarterly increase were from human health and social work activities driven by increased GP visits at the start of the quarter and a large increase in coronavirus (COVID-19) testing and tracing activities and extension of the vaccination programme."

www.ons.gov.uk/economy/grossdomesticproductgdp

Could somebody please explain how human ill health is "good news"?

Casdon: Your more realistic assessment was the one with which I began this thread.

Growstuff: GDP growth is usually stated as real GDP growth after adjusting for inflation. It is, according to the BBC, one of the most important ways of measuring how well or badly the economy is doing. It reflects a multitude of activities which affect all of our lives, one way or another.

Of course, ill-health is not good news. The emergence of Omicron dampened activity in the final months of the year although increased health activities seems to have provided some offset, rather more than many anticipated.

GDP statistics are always estimates and subject to revision; but since there is no shortage of gloom when the figures are bad, it seems only reasonable that we allow a little sunshine when they are better than expected.

So it was Cunco, sorry. It’s amazing how people draw different conclusions from the same piece of information. I’d say this is like the curate’s egg.

Thank you Cusco for an unbiased factual post. Like hens teeth on here. We all need bolstering up a bit it seems relentlessly bad news and tge good never mentioned. Other good news how well our fishermen on our coasts are doing, from high unemployment to a buoyant market.

I second that Allsorts. I always wonder why those who can never see any positives to living in the UK want to stay here as it’s so awful.