UK growth accelerated in the fourth quarter of last year

The fourth quarter saw UK growth speed up to 0.7% for the three months. The quarterly pattern last year according to the ONS was 0.2% in Q1, 0.6% in each of Quarters 2 and 3, and 0.7% in Q4.  The ONS says this amounts to 1.8% growth for the year as a whole, though the four quarters as reported gives you a figure of 2.1%.  What is clear from these figures is the economy grew faster after the Brexit vote than before by a decent margin, the opposite of the official and expert forecasts at the time.

As the ONS rightly said “In the fourth quarter the UK experienced the strongest arte of growth among European groupings and G7 countries”. Let’s hope the Treasury adjust their forecasts for our economy in the Budget statement, as their recent forecasts have been far too low.

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21 Comments

  1. Denis Cooper
    Posted February 22, 2017 at 11:50 am | Permalink

    So over just one year UK GDP has risen by 2.1%, while according to Michel Barnier in 2012, on page 13 here:

    http://ec.europa.eu/internal_market/publications/docs/20years/achievements-web_en.pdf

    ““20 years of the European Single Market”

    “The collective GDP of the EU member states in 2008 was 2.13% higher than it would have been if the Single Market had not been launched in 1992.”

    While a German report suggests that the benefit to the UK has been well below that EU average, at about 1.0% added to per capita GDP.

    • Lifelogic
      Posted February 22, 2017 at 12:59 pm | Permalink

      There has be no positive benefit of being chained to the sclerotic, over taxed, over expensive, green crap promoting, CAP & Common Fishing Policy pushing, diesel pushing, hugely over regulated & over protected EU & non selective immigration pushing EU. Why on earth would there be? There has been massive negative impact which will take time to undo, the soon we start the better.

      Alas Theresa May want to keep all the EU employment red tape “and build on it” and seems to want even more government, more taxation, more regulation, more intervention, endless government waste and even central wage controls.

      What a misguided, socialist buffoon she appears to be. Surely at her age it is time to grow up and get real or to join Corbyn. When have such policies ever worked to benefit an economy?

      • Lifelogic
        Posted February 22, 2017 at 1:02 pm | Permalink

        Just the negative impact of the ERM was massive, and we did not even get an apology from the appalling John Major, he did not even learn anything for it!

  2. Jack
    Posted February 22, 2017 at 1:07 pm | Permalink

    Laughable growth rates. China grows over triple that in a “bad year”. But they have massive state bank lending (govt deficit spending by any other name since they just roll it over), while we have austerity.

    Reply China has a smaller state debt as a proportion of GDP than the UK. It is a much poorer country per head, so it can grow faster to catch up with advanced country levels of output and income.

    • hefner
      Posted February 22, 2017 at 3:20 pm | Permalink

      Another way to put it is that putting so much emphasis on growth rate is very often misleading. Japan has had very little growth for twenty years, but I am not sure many Japanese would like to exchange their life with a Chinese or a British person.
      Everything is relative, and proper discourse should (try to) put such things in perspective.

      • hefner
        Posted February 23, 2017 at 12:49 pm | Permalink

        And I cannot resist this aphorism: “Growth for the sake of growth is the ideology of the cancer cell”.

    • Jack
      Posted February 22, 2017 at 5:18 pm | Permalink

      China state bank lending has been between 20 and 30% of GDP for years. Even after global crash of 2008 it skyrocketed further as a direct stimulus plan by the authorities. If the Communist party tells you to lend, you lend!!!

      It’s functionally the same thing as government deficit spending too (if you understand BoE monetary operations, and also how bank loans create deposits, then you’ll know what I mean). You really think that has nothing to do with it?

      And yes govt debt is smaller as % of GDP because it’s hidden by state bank loans (look at private debt as % of GDP!)

      • Jack
        Posted February 22, 2017 at 5:31 pm | Permalink

        Also could we stop saying “government debt as a % of GDP” and instead use “national savings as a % of GDP” or “net financial assets as a % of GDP”. It’d be far more accurate.

        Government “debt” is a liability of the government, true, but it’s an asset for everyone else (private businesses, households, individuals, foreign sector, etc)

        • Lifelogic
          Posted February 23, 2017 at 1:32 am | Permalink

          “but it’s an asset for everyone else”

          Well “everyone else” is mainly overseas investors or UK pension and insurance funds (effectively forced to buy these assets), and always assuming the government actually performs on the debt and does not devalue it too much in the mean time. Which is quite likely given the duff things they are doing with it, HS2, Hinkley, greencrap subsidies, corrupt foreign aid, the absurd NHS structure, yet more red tape …….

    • acorn
      Posted February 22, 2017 at 5:38 pm | Permalink

      The State debt as a proportion of GDP matters little to a country that issues its own currency. It is the non-state (private sector) debt that matters.

      A currency issuing government never runs out of its own money. It can buy anything and pay any bill presented to it in its own currency. BUT BUT BUT, it can’t spend faster than the private sector can create goods and services, from the resources available to it, particularly skilled labour; machines and raw materials. If it does, you get inflation big time.

      Please have a read of https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/monthlyeconomiccommentary/feb2017 Particularly section 8 and fig 4. Private sector consumer credit is expanding at over 10% per year. Private sector debt fuelled spending, is replacing government sector deficit spending.

    • Lifelogic
      Posted February 22, 2017 at 10:39 pm | Permalink

      You say China is a much poorer country per head, so it can grow faster to catch up with advanced country levels of output and income. Well perhaps a some truth in this.

      Nevertheless growth mainly comes from technical innovation and efficiency and getting rid of pointless parasitic jobs. The UK is very well placed for this. So even in the UK it could be far, far higher. The bloated state sector, over regulation, the expensive energy religion, over taxation and the rest insures that so many jobs in the UK are essentially parasitic or even harm productivity.

      We could very easily double GDP in a few years. With a state sector at no more that 25% of GDP and by cutting regulation. But T May would rather have gender pay reporting, high taxes, stamp duty at 15%, IHT at 40% (over nothing very much), expensive energy, central wage controls, an absurd and dysfunctional NHS and ever workers and customers on customers boards by law.

      The UK has excellent cheap energy fracking potential too.

      • hefner
        Posted February 23, 2017 at 9:20 am | Permalink

        Is GDP a proper measure of the wealth of a country? The pros and cons of using GDP as sole measure have now been questioned for more than ten years, which does not prevent politicians of all hues from commenting on it every so often.
        Do you remember, the cleaning up of Exxon Valdes and Deep Horizon oil spills contributed to increases of the US GDP. Any war, provided enough armament is used, destroyed and stocks of it rebuilt will also increase it.

        So using a GDP-based measure? maybe with some pinches of salt?

        • hefner
          Posted February 25, 2017 at 8:56 am | Permalink

          I look forward to the day when politicians will advertise GDP PPP (including Purchasing Power Parity). Obviously it would take longer to get it, but it would certainly help put the GDP into the proper perspective.

  3. Denis Cooper
    Posted February 22, 2017 at 3:48 pm | Permalink

    http://www.telegraph.co.uk/business/2017/02/22/britain-faces-legal-void-fails-strike-eu-trade-deal-warns-ex/

    “Britain faces ‘legal void’ if it fails to strike EU trade deal … ”

    So do the other EU countries if they fail to strike a deal; there are two sides to this coin, but somehow the other side never gets mentioned by pro-EU defeatists in the UK.

  4. British Spy
    Posted February 22, 2017 at 5:17 pm | Permalink

    PM Questions
    Tom Watson, he who sits at the side of Corbyn sometimes, the one wearing glasses, and never says a word,-…… TODAY…….. said a word !
    Oh yes he did!
    Being Corbyn’s only serious replacement, it is significant.
    At a guess, and with not a word from the LibDems, I bet I know what the postal vote was in the two by-elections scheduled for tomorrow.

  5. Deborah
    Posted February 22, 2017 at 6:00 pm | Permalink

    Estimate for Q4 2016 GDP annual growth is 2.1% , final estimate for 2016 due end March.
    1.8% for 2015 GDP annual growth.

  6. Narrow Shoulders
    Posted February 22, 2017 at 8:24 pm | Permalink

    I prefer they keep their forecasts pessimistic and stick to spending reductions rather than the previous Chancellor’s trick of producing growth forecasts from nowhere and not cutting tax credits.

  7. margaret
    Posted February 22, 2017 at 9:32 pm | Permalink

    Listening to PM question time today the main spending theme was the NHS again. More Doctors ? we don t need more just need to improve quality and management . If everyone has little specialities and doesn’t look at the whole person ; there are bound to be shortages. Corbyn was citing the GMC talking about more drs but when talking about nurses only cited a union . Why do you politicians choke on the words NMC, the Nurses professional body. What is wrong with giving the British Nurse the credit for decades of work and not immigrant doctors whose standards are lower than traditional Nurses. Why are you so embarrassed to acknowledge your own. Do you realised I spent years going around wards explaining to these doctors what to do and so did many other Nurses. The way you have treated your own is disgraceful. I think many of you have weird perceptions of what a Nurse does and confuse, auxillaries , health care assistants, care assistants , orderlies, state enrolled nurses with the highly professional Nurse. You must have been watching too many Carry on films where the patients carried out operations and think they have the answers! Never mind I am a doctor and deserve respect . We are highly intelligent ,knowledgeable nurses and deserve respect.
    You probably won’t publish this even though it is the biggest most important employer in the country , because you all have been wrong.

    • Anonymous
      Posted February 23, 2017 at 7:11 am | Permalink

      In the palliative care of my father we have nothing but praise of the auxillaries and virtual contempt of some of the nurses. Their jolly hockey sticks attitude is totally inappropriate when they come to give his injection.

      “And just WHAT have you been up to ?” hands on hips, looking at my dad’s plastered arm, assuming he’s a 95 year old geriatric (because he looks that old now at 76)

      “I have prostate bone cancer – it should be in your notes.”

      Or a breezy

      “So how are we today ?”

      “Pretty awful if I’m honest. I want it to end.” Dad now blind in one eye, only able to use one arm, every major bone crumbled and close to death.

      “Oh – you don’t mean that.”

      “Yes I do.”

      “Oh no you don’t, we won’t have any of that talk.”

      “OK. Musn’t grumble. Things could be worse.”

      Sorry. Many so called professionals have been utterly appalling. The care visitors on the other hand have been fantastic. And yes. They are white English. (So much for them not being prepared to wipe people’s bottoms.)

      I believe that the NHS would be better concentrating on delivering a more basic level of care and compassion.

    • Anonymous
      Posted February 23, 2017 at 8:01 am | Permalink

      BTW the NHS is not the most important employer in the country. The employer that generates the wealth that pays for the NHS is the most important in the country.

      The NHS has become a religion. It has the potential to bankrupt us. It is now the trade wing of the Labour movement and it doesn’t even care to look after its own resources, going by the recent BBC programme on health tourism – so rightly nursing jobs take the brunt of it (wrongly so do the taxpaying patients.)

  8. stred
    Posted February 23, 2017 at 11:48 am | Permalink

    The ONS has just released the latest net migration figures, which are lower than the previous quarter. These are obtained through interviews of samples at ports. However, it is interesting that NI numbers have stayed the same with a 1% decrease in EU registrations and a 1% increase in non-EU.

    GDP growth is increased by immigration, so we can expect increased growth but must remember to divide it by the increased population to see any real gain.

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    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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