Today’s GDP figures are another sign that the recovery is strengthening. The 0.8 per cent growth in the first quarter is equivalent to more than 3 per cent annual growth. This means that the UK is on course to have the fastest growing economy in the G7 this year.
The rapid fire press releases from Osborne, Alexander and Clegg this morning all strive to avoid saying that the job is done. But with the economy having grown 3.1 per cent since this time last year, it is clear that the economy is now on a far healthier trajectory. No one can say that it is bumping along the bottom anymore.
The crucial political question is, as always, when and how many voters will feel the benefits of the recovery. My sense is that by the autumn more people will be beginning to feel it. With the economy growing at this pace, more firms will begin to invest the cash they’ve been accumulating for the past few years—further consolidating the recovery. Also, I suspect that the next round of pay negotiations in private sector firms will begin to see a return to regular pay rises. If this happens, then the Tories can expect to yield a significant political dividend from the recovery.
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