UK economy grows at 2.2% a year in Quarter 3

They have had to revise their growth figures up again. The third quarter saw growth as fast as second quarter, and faster than first quarter. It was well above all the gloomy forecasts of slowdown or recession this winter following the vote.

The CBI latest survey is positive. Car output this year is growing rapidly and is now higher than any year this century. Surely this is good news all can celebrate?

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44 Comments

  1. turboterrier
    Posted December 23, 2016 at 3:34 pm | Permalink

    Surely this is good news all can celebrate?

    Not if you are a dedicated remoaner!

    Sadly for us there are too many in both houses.

  2. Peter VAN LEEUWEN
    Posted December 23, 2016 at 3:51 pm | Permalink

    Not bad!
    Although . . . The Netherlands economy grew 2.4% in this 3rd quarter and we will have a balanced budget as from 2017 (no annual deficit). Maybe because we have the euro? πŸ™‚ πŸ™‚ πŸ™‚

    • Yosarion
      Posted December 23, 2016 at 9:00 pm | Permalink

      Em, then again you did not have to bail out your Bank because no more Boom and Bust Brown mates bought it of you.

      • Peter VAN LEEUWEN
        Posted December 24, 2016 at 8:01 am | Permalink

        @Yosarion: The Dutch tax-payers had to bail out ABN-Amro, ING and SNS.

        (Thanks to Jeroen Dijselbloem, the trend is belatedly shifting to “bail-in”, although we now see that in Italy, with many small private bond holders, that is still deemed “politically impossible”. )

        • libertarian
          Posted December 24, 2016 at 11:58 am | Permalink

          P v L

          “Gross domestic product (GDP) – as provisionally estimated by Statistics Netherlands (CBS) – advanced 0.7% compared to the second quarter (qoq). Moreover, the second-quarter growth figure was revised slightly higher to 0.7% (was: 0.6%).”

          Yes the Dutch govt spent 22 billion bailing out ABN-Amro in 2007 , however they bailed out the Fortis part only having split the shares between Fortis, Santander and RBS owned part. The UK taxpayer bailed out the RBS part. Another failure on behalf of the EU who under competition law should never have allowed the merger in the first place ( but then they really really wanted a pan European bank… that worked well then)

          If you think the Euro is the reason for your economy having a balanced budget be prepared for a big shock when the Eurozone come calling for you to help prop up the Italian and Greek economies

          • Peter VAN LEEUWEN
            Posted December 24, 2016 at 4:39 pm | Permalink

            @libertarian: I was only joking as far as my remark about the euro. Hence the πŸ™‚
            Nevertheless I (we) want the euro to stay and to succeed, which it will eventually, and also I don’t blame the EU for as many things as some British do.

    • Anonymous
      Posted December 23, 2016 at 11:44 pm | Permalink

      A far right party promising to ban mosques would never have become so popular in Britian as it has in the Netherlands. In fact it would have been banned here.

      Possibly because we don’t have the euro ??? πŸ™‚ πŸ™‚ πŸ™‚

      • Peter VAN LEEUWEN
        Posted December 24, 2016 at 8:12 am | Permalink

        @Anonymous: I admit not to be happy at all with this 1-man party (legally, this party has 1 member, 1 chairman, 1 person in the supervisory board, all of them the same person).
        Then again, I’m happy not to have sharia law anywhere in the Netherlands, unlike the UK, but just the same rule of law for all.

        • Anonymous
          Posted December 24, 2016 at 9:38 am | Permalink

          If you don’t get Geert you’ll get Sharia.

          My point about the euro was that it hasn’t stopped your people from being unhappy and it has certainly caused unhappiness in Greece.

          • Peter VAN LEEUWEN
            Posted December 24, 2016 at 4:47 pm | Permalink

            @Anonymous:
            The World Happiness Index 2016 just ranked the happiest countries on Earth

            The Netherlands: 7, a bit lower than I expected, as I have seen other rankings but haven’t got the time right now

            The UK: 23, a bit flattering if you ask me πŸ™‚ After all, you suffer under this evil empire called the EU and your delivery to ultimate freedom only came on June 24th. I bet that you’re now a clear number one! πŸ™‚ πŸ™‚ πŸ™‚

          • Anonymous
            Posted December 24, 2016 at 9:04 pm | Permalink

            But why is a radical politician so popular in the Netherlands ? If your people are happy then why do they want such change ?

            We haven’t left the EU btw. We haven’t even activated A50.

          • Peter VAN LEEUWEN
            Posted December 24, 2016 at 10:22 pm | Permalink

            @Anonymous:
            “But why is a radical politician so popular in the Netherlands?”
            That is a good and quite worrying question. Talented demagogues can be borne in any country. History shows as much. We currently see some discontent in the UK, the US and on the European continent, maybe to do with a fast changing society leading to fear, making people vulnerable for “easy solutions” and “strong leaders”.
            Wilders will not be able to form a coalition government and people may see that in the coming months.

    • petermartin2001
      Posted December 27, 2016 at 11:10 am | Permalink

      Peter Van Leeuwen,

      Are you familiar with the concept of sectoral balances? With equations like this?

      Govt Budget Surplus = Trade Surplus – Savings of Private Dom Sector

      As the Netherlands runs a Trade surplus of some 12% of GDP, it is perhaps somewhat surprising that the Government is only running a balanced budget.

      The advice to the other EU countries from Germany and Holland is that we should be more like you. This means running a large trade surplus and balancing our budgets too.

      Do you see the problem there?

      • Peter VAN LEEUWEN
        Posted December 28, 2016 at 12:21 am | Permalink

        @petermartin2001: I know that the IMF has suggested that countries like Germany and the Netherlands increase wages, consume more and export less, but what is wrong with the UK doing the opposite i.e. decrease wages or devalue, become more competitive and export more? Maye a new UK industrial policy can achieve that?
        The Netherlands has larger problems than being concerned about the UK, like the unwillingness to hand ever larger public debt to our next generation, and giving private households more time to decrease the huge private (mortgage) debts in our country. More inflation would help these private debts and also our pensions (higher interest rates), but it would make the export in our very open economy again stronger resulting in a larger trade surplus, so in a way we are already “suffering” as pensioners and house owners.

        • Peter Martin
          Posted December 28, 2016 at 9:32 pm | Permalink

          @PvL,

          Yes, it is generally agreed by nearly everyone in the UK that it would be better if the UK exported more and imported less. The recent fall in the value of the pound should help achieve that -at least to some extent. The devaluation isn’t generally agreed, though!

          But, this is not an option which is open to the trading partners of the Netherlands and Germany who use the euro. Logically, if the governments of the surplus countries wish to continue to run those surpluses they should be comfortable with the idea of their euro trading partners running continued deficits. Surpluses and deficits do have to balance out. It’s not hard to see the arithmetic of that.

          Except it isn’t generally seen like that in Germany and Holland as I’m sure you are aware. Do you have any thoughts on why not?

    • A P Lin
      Posted December 31, 2016 at 10:45 am | Permalink

      You mean the currency that is choking most southern EU nations to a slow death. Not very socially minded, you northern EU nations, in fact rather cruel.

  3. Martyn G
    Posted December 23, 2016 at 3:59 pm | Permalink

    Not if you are a ‘Remainer’, John. They will project it forward as being an impending disaster with inflation, collapse of Β£ and anything else they can drag up to depress the markets and people….

  4. Newmania
    Posted December 23, 2016 at 4:34 pm | Permalink

    Hardly the point is it .

    • Anonymous
      Posted December 23, 2016 at 11:47 pm | Permalink

      Hardly what you’ve been predicting is it.

    • Richard1
      Posted December 24, 2016 at 5:25 am | Permalink

      Well it certainly contradicts all those dire forecasts made so authoritavely during Project Fear.

    • libertarian
      Posted December 24, 2016 at 12:00 pm | Permalink

      Newmania

      Yes its totally the point, you and your remainer friends keep telling us its all gone Pete Tong , that we’re going down the pan and we’re all gonna die horribly.

      The only problem is so far you’ve been 100% WRONG

      Maybe take a look at reality?

  5. ian wragg
    Posted December 23, 2016 at 5:08 pm | Permalink

    Of course on the BBC it’s despite Brexit.
    I see the Spanish have rubbished Wee Krankies ideas. Why doesn’t TM slap her down for good.
    Today the Labour Party are floating a kite for a GE. Corbyn must be out of his tree if he thinks he has a chance.
    The Tunisian who drove the lorry has just done a classic manoeuvre to demonstrate the stupidity of Schengen and free movement. UKIP should exploit this for all it’s worth.
    Merry Christmas.

  6. Lifelogic
    Posted December 23, 2016 at 5:25 pm | Permalink

    And this despite expensive religious green energy, a bonkers fiscal regime, endless red tape, absurd white elephant waste like HS2 and the dithering, wet, lefty call me Miliband III, T May.

    Just get government out of the bloody way please and we will do fine.

  7. am
    Posted December 23, 2016 at 5:26 pm | Permalink

    No, not all can celebrate. Good news is ignored in remainsville. It is a long time since the first pmi survey isn’t it. Recession was cried from the roof tops but now it is wait, wait.

  8. acorn
    Posted December 23, 2016 at 5:52 pm | Permalink

    Celebrate as JR says; but, don’t look at the Q3 Balance of Payments. OK, if you must.
    https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/balanceofpayments/julytosept2016 .

    “Real household spending per head increased in Quarter 3 2016 (0.6%) compared with Quarter 2 2016. This continues the general upward trend seen since Quarter 3 2011, but it remains 0.5% below pre-economic downturn levels.” Thank-you Mr Osborne, you really knew how to kill an economy with “austerity” IMF style.

    The economy is driven by household spending, what is known in the trade as “demand side”, not Arthur Laffer “supply side”. https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/economicwellbeing/quarter3julytosept2016 .

    The Brexit dive in the Pound Sterling is starting to show a little now. By the end of Q1 2017, when Mrs May plays her Article 50 card, the effects will be more obvious and starting to hurt.

    Mrs May’s “remainer” plan, looks like coming in on schedule, with a little luck and judgement. πŸ˜‰

    • Anonymous
      Posted December 23, 2016 at 11:58 pm | Permalink

      Yes. I think it is a remainer plan. I was one who voted Brexit fully expecting it to hurt. I don’t think many were swayed by the battle bus.

    • Dame Rita Webb
      Posted December 24, 2016 at 6:15 am | Permalink

      Acorn you can see who the low information voters are amongst the commenters here if the believe this one from JR. They just do not seem to realise that its “growth” pulled forward through the use of borrowed money.

      • libertarian
        Posted December 24, 2016 at 12:12 pm | Permalink

        Dame Rita

        “They just do not seem to realise that its β€œgrowth” pulled forward through the use of borrowed money”

        When and where has growth occurred without borrowed money?

        • rose
          Posted December 24, 2016 at 5:49 pm | Permalink

          And who needs growth if their population isn’t growing? The finite countryside certainly doesn’t.

          • libertarian
            Posted December 24, 2016 at 10:48 pm | Permalink

            rose

            stagnation leads to atrophy

            When you say the countryside is finite ( apart from land area ) what do you mean?

          • rose
            Posted December 26, 2016 at 4:44 pm | Permalink

            I mean there is a finite amount of countryside and if we keep building on it and putting roads through it there won’t be more coming along in the future.

            The Japanese have seen a drop in their population of a million recently, and at the same time a small amount of growth. People here have long sneered at them for not taking in extra people and for not having a growing economy. The orthodoxy here is that we have to keep growing our population in order to grow the GDP but this isn’t doing us any good, and we are becoming poorer per capita. The happiest countries are the ones with the smallest populations and it isn’t difficult to work out why. They are richer per capita and more comfortable with a better quality of life and a better environment. That is why other populations want to pile into them.

        • acorn
          Posted December 25, 2016 at 8:11 am | Permalink

          When the government spends the money, it’s called fiscal stimulus. The government spends without borrowing from anyone, it has a money tree!!!

          The government plucks the money leaves from the tree, lets them fly around the economy making real goods and services. Then it collects collects them all up as taxes and puts them back at the bottom of the tree, to fertilize it to make new leaves.

          But naughty boys and girls save some of the leaves and don’t give them back to the government as taxes. They buy imports and give the money to foreigners so they can buy even more bits of London. Then all those savings get called the government debt, when they are actually private sector savings.

          • libertarian
            Posted December 25, 2016 at 4:28 pm | Permalink

            acorn

            You must be an economist for a living.

          • petermartin2001
            Posted December 27, 2016 at 11:59 am | Permalink

            I wish more economists were like Acorn. They really ought to be taking the lead and picking us up every time we mistake money for resources.

            So when politicians ask questions like “where is the money going to come from” to pay for the NHS/Schools/ New Infrastructure or whatever, a responsible economist should be pointing out that money for a currency issuing government is never a problem.

            The problem is the finite real resources that are available to us in the economy. So the real question should be:

            “where are the resources going to come from?”

          • APL
            Posted December 28, 2016 at 1:09 pm | Permalink

            Acorn: “The government plucks the money leaves from the tree, lets them fly around the economy making real goods and services.”

            Except it doesn’t.

            The government passes the new money to the Banks, they get the first and most significant benefit, as they are able to spend it at today’s value.

            Immediately it is spent, it devalues itself and all other money in the economy, since the mere act of printing money ( your magic money tree ) doesn’t increase economic activity, it actually depresses economic activity, because it reduced the value of capital available to invest and innovate.

            Everyone else, those below the banks in the hierarchy of government favor, get screwed, not only has their prior store of wealth and ability to invest and innovate been reduced, but the current value of their cash holdings have been eroded too.

          • libertarian
            Posted December 28, 2016 at 5:42 pm | Permalink

            The UK’s national currency exists in three main forms, the second two of which exist in electronic form:

            Cash – banknotes and coins.
            Central bank reserves – reserves held by commercial banks at the Bank of England.
            Commercial bank money – bank deposits created either when commercial banks lend money, thereby crediting credit borrowers’ deposit accounts, make payments on behalf of customers using their overdraft facilities, or when they purchase assets from the private sector and make payments on their own account (such as salary or bonus payments).
            Only the Bank of England or the government can create the first two forms of money, which is referred to as β€˜central bank money’. Since central bank reserves do not actually circulate in the economy, we can further narrow down the money supply that is actually circulating as consisting of cash and commercial bank money.

            Physical cash accounts for less than 3 per cent of the total stock of money in the economy. Commercial bank money – credit and coexistent deposits – makes up the remaining 97 per cent of the money supply.

  9. Juliet
    Posted December 23, 2016 at 7:13 pm | Permalink

    CBI latest survey is positive,
    CBI forecast was negative before, during and after the vote
    Brexit proven good many wrong

  10. getahead
    Posted December 23, 2016 at 7:18 pm | Permalink

    “Car output this year is growing rapidly “.
    Excellent news John, considering that the Germans and French may be forbidden to sell any more cars to Britain.

  11. Prigger
    Posted December 23, 2016 at 10:45 pm | Permalink

    Christmas sales must be doing very well. Media has not mentioned shopping statistics once. No street interviews with the public asking whether they are spending more or less this year.

  12. E.S Tablishment
    Posted December 23, 2016 at 11:09 pm | Permalink

    Predictable cross-border Terrorism and good economic news has kept the Labour Party hiding under their Mums’ kitchen tables this Christmastide . Has no-one missed their dopey news soundbites? They daren’t and can’t say anything can they?

  13. Eh?
    Posted December 23, 2016 at 11:38 pm | Permalink

    “The CBI latest survey is positive”. Good ! We hope they enjoy their promised relocation to France, Germany and Italy. Au Revoir! Auf Wiedersehen! Arrivederci! and Wadaeaan! ( it’s Tunisian )

  14. Original Richard
    Posted December 24, 2016 at 8:54 am | Permalink

    This is indeed good news and not as predicted by Mr. Cameron, Mr. Osborne, the Governor of the Bank of England, the IMF, the OECD, the corporates, the banks, the hedge funds, the BBC, HE, the EU paid quangos etc..

    All of whom predicted immediate dire economic consequences simply upon the vote to leave.

    But this may not last as the EU and powerful remainers in the UK keep working to bring the UK economy down.

    However, it needs to be remembered that a majority voted to leave despite these dire economic warnings believing that sovereignty was more important than a few pieces of silver and with the Euro and illegal migrant crises in the EU worsening it is unlikely these voters will be changing their mind.

    To leave an EU which shows no desire to properly protect its external borders is just sanity.

  15. Antisthenes
    Posted December 24, 2016 at 10:48 am | Permalink

    The remainers have all but admitted that their Brexit predictions were all fictitious. They believe that it was reasonable to make them as they believe all is fair in love and electioneering. Unfortunately they are right. Gaining votes is and probably has always been about deceit and bribery. Fortunately not all politicians are completely dishonest and not all voters are gullible and credulous. Some are even rational and logical so from time to time we have governments that are competent and sensible. Usually they do not last too long because the bribes are seen to be insufficient or even being curtailed and the opposition is offering to increase them and/or replace them.

  16. helen jones
    Posted December 31, 2016 at 3:30 am | Permalink

    The threat of double digit Council Tax increases to fund social care are scary in the extreme
    The inc will be way more than the 2.5% inc on state pension and for those reliant on savings income it will be desperate poverty on top of the last 8 years of robbery conducted by Carney and the MPC
    Millions of pensioners are now struggling on far far less than even Β£11.600 age allowance but because they dare to have savings are denied help yet we send billions
    in foreign aid to China and India whose economies are far better than the UK this is total madness Charity must begin at home and stop all foreign aid and care for our own elderly and sick

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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