George Osborne has dodged a second bullet in a week. After learning that borrowing had fallen by a modest £300 million on Tuesday compared to last year, today we found out that a triple dip has been averted with meagre growth of 0.3 per cent in the first quarter of the year.
As Joe Grice from the ONS explained this “slowish growth” shows “no basic change to the fundamental pattern” with GDP “broadly flat over the last 18 months”. Indeed as the TUC’s Duncan Weldon points out, the economy has grown by just 1.8 per cent in the 11 quarters since Osborne’s first budget.
All this means that the recovery since the trough in the second quarter of 2009 remains the slowest on record. Comparing the current recovery with similar periods in the 1970s, 1980s and 1990s, shows how poorly the UK economy has performed. The initial burst in growth took place in the year immediately following the trough and there has been very little since.
More worrying, perhaps, is that all the growth in the first quarter of 2013 was driven by services. The construction sector contracted while production grew at a tiny 0.03 percentage points. The manufacturing industries are in recession after falling by 0.3 per cent, following a decrease of 1.4 per cent in the previous quarter.
Britain may have avoided a third recession in quick succession but the recovery is far from secured and the ‘march of the makers’ is yet to materialise.