That the UK economy grew by 0.7 per cent in the final three months of 2013, leading to the fastest growth annually since the financial crisis, is obviously very good news for the Coalition. The quarter-by-quarter figures have zig-zagged, but the overall growth for 2013 is 1.9 per cent over the year, which is the most important figure.
These GDP figures from the ONS, published this morning, enable David Cameron to say that this is further evidence of the Coalition’s ‘long-term economic plan’ succeeding, and use the new Tory buzzword,‘security’. And though the economy is still 1.3 per cent below its pre-recession peak (see the graph below), George Osborne can now see a trend that settles him in nicely ahead of the 2015 general election of better-than-expected economic figures (his own forecasts in December 2012 had 2013 GDP growth of 1.2 per cent, and Q4 GDP growth at 0.5 per cent), just as Gordon Brown faced continually worse-than-expected figures in the lead-up to the 2010 election.
But the detail of the figures also gives Osborne an opportunity to argue back very quickly indeed against Vince Cable’s latest warning that ‘the shape of the recovery so far has not been all we might have hoped for’. The Business Secretary told the Royal Economic Society last night that:-
‘Like the Chancellor, my message is that recovery is welcome, but much hard work remains. My particular focus is how we progress from a short-term bounce-back to sustainable, balanced, long-term recovery.’
Osborne has been pointing out this morning that the growth ‘is broadly based’, with the manufacturing sector growing fastest. The table below shows growth by sector: while manufacturing grew by 0.9 per cent, the construction sector contracted by 0.3 per cent.
Treasury Questions starts at 11.30 today: while Ed Balls will be hoping to use his line about the 50p tax, George Osborne and colleagues have quite an easy task in flinging figures back across the Chamber at him.
Give something clever this Christmas – a year’s subscription to The Spectator for just £75. And we’ll give you a free bottle of champagne. Click here.