As expected the twin squeezes on the UK from monetary and fiscal policy along with a weak world background produced no growth in the fourth quarter of 2019.
For the year as a whole the UK managed a creditable 1.4% growth, a bit higher than I expected given the policy background and a testimony to the underlying strength of the economy. This means the UK outgrew the Eurozone again last year. This happened despite the world car manufacturing recession and the impact of higher taxes on UK homes and cars.
Given the weakening world background the UK needs positive action from the authorities to support the uplift in confidence generated by the result of the election.
February 11, 2020
I have never in my life experienced such hopelessness. The government is totally out of its depth. People we thought were conservatives, like Nick Timothy (see Telegraph article yesterday) that they have no concept of capitalism.
February 11, 2020
Capitalism proper died a long time ago – the Cold War was really about who would manage a world state model-the west or the USSR.People forget amidst the cold war rhetoric and propaganda that the Soviet model looked like it was working -in the 1930s when the west was enduring the Great Depression and again in the 1950s when even the CIA reported that the Soviet Union was growing more rapidly.
The fatal delusion was the excessive imputs required to achieve that impressive appearing output.A similar delusion has hold over the west currently-the idea that we more we spend,the richer we are.The more we waste on,say,HS2,the greater will be our GDP.Like the Soviets,we don’t have proper money anymore,so you can print as much as you like-through central bank activism – Until,eventually, you find out you can’t.
One of the most interesting books I’ve read in the past 15 years is a now obscure “The Soviet Design for a World State” (1960)by US Professor Elliot R Goodman which in effect argued that the west needed to be more like the USSR in order to compete with it.
February 11, 2020
Capitalism depends on ease of access to markets.
Why have you voted to throw a spanner, crowbar, and anvil, into the UK’s perfect relationship with arguably the world’s richest, the European Union’s that is?
February 12, 2020
What difficulties of access?
A extra form to fill in?
A possible customs check which can happen now at any port anywhere in the world.
Stick to things you know something about.
February 11, 2020
Keynesian rhetoric. When your party starts reforming the bottomless cesspit that is Labour’s client state, cutting income tax and deregulating business then people might listen to what you have to say. Until then, it’s more middle way nonsense
I see the BBC will escape reform now we have a pro-BBC PM.
What’s the point of your party if you’re simply going to aid and abet all that filth Labour’s built up since 1997?
I just don’t get it. It’s too depressing by half to see a Tory government acting in this manner
February 11, 2020
You didn’t seriously think that you were going to get the Mob Rule, for which all the multi log ins clamoured, did you?
February 11, 2020
DOMINIC
Itās too depressing by half to see a Tory government acting in this manner
And some. Are we being shafted or what?
February 11, 2020
Dominic
“I see the BBC will escape reform now we have a pro-BBC PM.”
And Greta is in on the act too…….she’s getting a BBC channel all of her own, and we will be paying for it.
February 11, 2020
The effects of the Corona virus shutdown in China will cancel any growth even if the epidemic doesn’t spread. We’ll be very lucky to avoid a global crash if some of the predictions are true. Splashing cash to bankers and big business won’t work this time.
February 11, 2020
Just see to it that we get this positive action from treasury and chancellor.
February 11, 2020
agricola
In your dreams.
February 11, 2020
Assuming I understood the graph, it appears that the UK is predicted to grow by 0.3% ( thanks to the service industry ) in the 1st quarter of 2020 …which looks more hopeful.
Our escape from the damaging economic policies of the EU presages great prosperity for the country.
We will outstrip the failed EU as it sinks into its mire of obsessive harmonisation and integration!
February 11, 2020
And then they announce HS2 decision!!!
Utter despair.
Garden Bridge mk 2!!
February 11, 2020
So how do you think that the UK economy would perform, if all the counties had different product standards and checks at all of their borders?
In what way is the European Union’s ridding itself of such encumbrances “obsessive”?
It seems like plain good sense to me.
February 12, 2020
Martin.
Manufacturers make their products to suit the many different standards that exist in the many different nations they sell into now.
It is what UK manufacturing companies have done for decades.
February 12, 2020
If you operate the same rules then there is no need for border checks.
The simplest things pass you by, don’t they?
February 12, 2020
Rules need checking.
Imports and exports are checked randomly all over the world now by customs.
Stick to areas of trade you have experience of because currently it is plain you don’t know what you are talking about.
I’ve spent decades importing and exporting goods all over the world.
February 12, 2020
Obsessive = things can never be harmonised ENOUGH. A bit like killing sparrows really.
February 11, 2020
Why is GDP growth better than our quality of life? Why should mass immigration to increase GDP be better than improving quality of life, public services, our culture our environment, countryside, religion and generally our way of life?
Govt following the policy of a troubled sixteen year old school that is not costs and likely to be over a trillion pounds! All our homes altered, our transport changed, yet no evidence that man caused this, group think twaddle by a bunch of corrupt politicians who cannot even work or renumerate by the same standards they set everyone else!
The last election ballot paper should have asked what shade of socialism do you want? Johnson laughed at Corbyn for suggesting he was implementing Labour policy today. He was right. He should have highlighted the Tory govt over the last tan years even put former Labour ministers in charge of these projects and some still in place! Tell us Corbyn is not correct or wrong JR. Perhaps you will censor as you do other embarrassing blogs.
February 11, 2020
I don’t think HS2 is the answer.
Telling all and sundry you are banning the ICE from 2035 and scrapping gas boilers won’t do anything for confidence.
February 11, 2020
Ian Wragg
I donāt think HS2 is the answer.
Promise you, you are not alone. It will end up as the PMs Achilles heel. If he had the bottle he should have put a cap on the total cost and committed himself to not a penny more , not a penny less. Its our money he is playing around with and wasting. He is not living upto the dream that things could only get better.
February 11, 2020
Indeed. Surprising that anyone at all is buy new cars given that the old ones are so much cheaper and often so much better. Plus no one knows what the idiotic government or LEAs are going to ban next.
For growth we need more competitive banking (no 40% or 78% overdrafts drivel by the FCA), far lower and simpler taxes, far less red tape, cheap on demand energy, a bonfire of red tape, the cancellation of the endless government waste like the idiotic HS2, freedom and choice in healthcare and education, no mansion tax, no IHT and some sensible pro business vision. With Javid we clearly just have yet another dire, tax borrow and piss down the drain socialist in no11 – just like Brown, Darling, Osborne and Hammond.
February 11, 2020
HS2 to go ahead. Bridge between Northern Ireland and Scotland.
Boris does love splashing out OUR money on his vanity projects.
It looks like those that said he was May mark 2 might be proven correct.
February 11, 2020
@MickN; “It looks like those that said he [Boris] was May mark 2 might be proven correct.”
I’ll go further after today’s announcements, never mind ‘May Mk2’, will the real Jeremy Corbyn please stand up!…
February 11, 2020
With the HS2 go-ahead, and the apparent announcement that there is to be a dedicated Minister (presumably answering to parliament) to over see the project, does this mean the project has -in effect- been fully nationalised, otherwise how else will govt have full oversight and control without HS2 Ltd being able to hide behind commercial confidentiality nonsense etc?
February 11, 2020
Well the bridge is just a distraction that will not happen, but HS2 is an insane waste of money.
February 11, 2020
Lord Adonis even seems to think HS2 is green. Surely even Adonis cannot be possibly be that stupid – can he?
Then again in 2009 Adonis said the project would cost Ā£7 bn and be ready in 2020!
So we can clearly trust Baron Adonis with his proven track record.
February 12, 2020
Cameron/Osborn appointed LaboursPro EU fanatic Adonis above Tory ministers or former ministers.
February 12, 2020
Boris was asked about the hospital PFI deals done by Labour and said the taxpayer was lumbered with or forced to pay Ā£ 80 Bn for 12Bn of assets. So nearly as bad as the HS2 deal but not quite.
This is even before the cost of tax compliance and collection. Why when they know how appallingly inefficient government spending is do they want even higher taxes and even more of it.
February 11, 2020
MickN
“HS2 to go ahead. Bridge between Northern Ireland and Scotland.
Boris does love splashing out OUR money on his vanity projects.”
They are not his projekts.
Northern Ireland sold off – bridge to EU member state Scotland.
England hemmed in to a northern EU area.
You didn’t think those sneaky little soirees with Varadkar were insignificant, did you ? This is what they were planning all along.
We’ve been had over mate.
February 11, 2020
Quite apart from the madness of spending money on a bridge the main benefit of which will be to enable our competitor, the Republic of Ireland, to transport its goods by land to the EU, Boris actually wants to spend English taxpayers’ money building a bridge between two regions, Scotland and Northern Ireland, that could both be foreign countries in a few years’ time!
February 11, 2020
Has Boris oked HS2 because it is what EU wants? Makes me feel suspicious
Avery unpopular decision.
February 11, 2020
Not a single person I know thinks HS2 is a sensible project or a good use of money. The only explanation for it going ahead is surely corruption and vested interest. I cannot believe that anyone sensible actually thinks it is a sensible use of tax payers money. It is however not quite as moronic as the renewable subsidies and all the other green crap subsidies.
February 11, 2020
HS2 is a EU infrastructure project, as is the regionalization of the U.K. and England?
Ministers no longer talking or denouncing level playing field with EU. This is a Tory sell out on the quiet while Johnson tries to flag it to be something different. Why did they get rid of May? The March left has increased in pace, and some!
February 11, 2020
We are assured by the Mayor of West Midlands (Andy Street – PPE oxon yet again)) that Javid has pored over the figures for HS2 and concluded it has a payback.
Clearly Javid is even dafter and more incompetent than I though he was already. Totally unsuitable to be Chancellor as he is economically illiterate.
February 11, 2020
Everhopeful
“Has Boris oked HS2 because it is what EU wants?”
Got it in one.
February 11, 2020
Boris doesnāt seem to be able to control his urge to this money away. He is supposed to be a fan of Winston Churchill but I donāt remember Churchill throwing away money on vanity projects. Defeat the Germans yes. 105 billion to shave 30 minutes of a single train route, complete and utter fiscal irresponsibility.
February 11, 2020
Why worry? The economic consequences of ‘Climate Change’ will spell our death knell and Boris is pushing ahead with all speed towards it.
Then again, the natural world could still be here in another few thousand years. None of the past ‘climate change’ forecasts have been even close. We should be deep underwater by now!
February 11, 2020
I think HS2 as a passenger line is a white elephant even if it ever turns a wheel, but it might possibly make a useful truck-carrying route to carry the Irish lorries from Scotland.
February 11, 2020
Some 30 years ago they built a 2-lane cycle path from Maghull to Ormskirk (5 miles) and you are lucky to see a single cyclist at the weekend. They are currently building a cycle path on the dock road from Liverpool to Formby (13 miles) with the majority of that route used by commercial traffic (HGVs) in a mainly commercial zoneā¦.nobodyās going to use it
Reported today that the government is going to give Ā£5bn to buses and cyclists. How about fixing the roads so councils donāt have to pay millions in compensation. More green appeasement at tax payers expense.
February 11, 2020
Ah yes! but how will UK GDP growth be in the last quarter of 2020? Am afraid the world economies are in a state of undulating flux pending the outcome of the Coronavirus and China, and then Trump and the US elections but by far the biggest drag on our economy will be the loss of frictionless access with the EU- and we’ll probably start to see the results of this by March 2021- so nobody knows- only Michael Gove perhaps with his Smart Border- Lord help us all
February 11, 2020
Leaving the EU, assuming we donāt pay anything to the EU budget for a deal as Norway and Switzerland do, will save us Ā£10-12bn PA net. Boris has just committed this amount for 10-15 years for HS2, so letās not hear any more about how to spend that money. Itās also rumoured Mr Javid (or is it really Mr Cummings?) thinks Ed Millibands mansion tax would be a good way to cement votes in the North.
Itās great we have a Conservative govt and have avoided the horror show of Corbyn-McDonnell. But we cannot go through 5 years of virtue signalling. People who are anti-business and like politics of envy are always going to vote Labour/LibDem/separatist. No Conservative govt will ever be able to virtue signal itās way to these peopleāsā votes.
This govt has one shot at making Brexit a success, the U.K. needs to outperform the eurozone for people to agree itās been a success by the next election. That needs a relentless focus on pro-growth policies. Leftists will howl whatever a Tory govt does. Ignore them and focus on the right policies, Thatcher-Lawson style.
February 11, 2020
JR
“For the year as a whole the UK managed a creditable 1.4% growth, a bit higher than I expected given the policy background and a testimony to the underlying strength of the economy. This means the UK outgrew the Eurozone again last year.”
Selective statistics again.
Eurozone growth to Dec 2019 period 1% vs UK 1.1%. UK hadn’t streaking ahead. Some EU members worse, some better. At least compare like with like.
Source:: https/trad/ingeconomics.com/countries
February 12, 2020
Comparing the EU with the UK is comparing like with like.
The EU sees itself as a nation.
February 11, 2020
Oh look Newmania, Andy, Billy Hans Brown Iverson,Martin in C and Maggs
Looks like you were ALL WRONG again …….well I never
EU Commission President Ursula von der Leyen has confirmed the UK will get a bespoke trade deal with the EU, rather than a carbon copy of another countryās settlement. Another victory for Vote Leave, who always said the UK would secure exactly thisā¦
In a statement to the EU Parliament in Strasbourg, von der Leyen said she was willing to negotiate a zero tariff and zero quota relationship for goods ā something that no third country currently enjoys with the bloc
You lot should retire from punditry and take up knitting
February 12, 2020
but an awful lot of ‘pundits’ proclaimed Boris to be a breath of fresh air.
February 11, 2020
Is anyone surprised.
Given the announcement of recent Government policies I would be surprised if we grew at all for the next couple of years.
The car industry certainly will be on its knees.
February 11, 2020
The very questionable go-ahead of the HS2 project might help growth in our GDP but at what cost? Ā£106B, Ā£200B? Whichever, an enormous sum.
At the end of March 2019, UK Government debt was Ā£1821.3 Billion. Equivalent to 85.2% of GDP (ONS Data). The servicing of this debt amounted to 4% of GDP (Ā£48B) some 8% of Government Tax Income. How much more can we borrow without lenders taking flight?
The whole world is awash with debt. According to the IIF it hit $255 TRILLION last December which is more than Three times the global GDP. This is a record and the subsequent effects are yet to be revealed. I fear there will be a debt spark in the not so distant future that causes an explosion in the financial markets of the world and brings them crashing down. 1929 deja vu.
The warning signals from Lehman Bros and the subsequent 2008 bailouts have not been heeded but ignored globally and this country does not seem prepared for such a calamity. Seemingly only adding to the problem.
So it appears our new Government is just increasing our debt pile and the servicing charges with no regard to the effects of increased debt upon the Nation and its citizens. I look forward to our future with a sense of foreboding.
February 11, 2020
I hear there maybe some fishing boats going cheap in Europe to help build the British fishing fleet.
February 11, 2020
O/T. Yippee! I can’t wait. The BBC is doing a new series with St Greta travelling all around the world, no doubt by air and staying in wonderful hotels. Why are licence payers having to pay for this utter crap?
February 12, 2020
so the BBC is now doing the job formerly done by Greenpeace!
February 12, 2020
The BBC is obsessed with drowning the nation in endless climate alarmist propaganda. Never any balance at all, climate realists and sound honest scientists are banned.
February 11, 2020
What more proof does one need that the BBC is no longer fit for purpose. Giving air time never mind the cost to saint Greta has got to be the last straw. Totally out of touch with those licence payers. This action totally indefensible
February 12, 2020
Will they give airtime to Naomi Seibt? Another young lady, this time one who has actually studied the science over several years and can readily answer questions about it and has the opposite conclusions of Greta. I think we know the answer to that.
February 12, 2020
In the several YouTube videos I found I heard Naomi Seibt explain how she became sceptical of climate science but there was absolutely no science not even scientific background whatsoever. Could you direct me to one that shows, as you say, that Naomi Seibt āhas actually studied the science over several yearsā. Thanks a lot in advance.
February 13, 2020
Has Greta any scientific background ?
Yet I expect you believe every word of her pronouncements.
February 14, 2020
As far as I know from reading newspapers and watching websites, GT is not talking āscienceā, just asking people to listen to scientists.
February 11, 2020
Johnson is now showing why voting Tory and not the BP will prove to be an appalling decision that will change nothing and perpetuate all that has gone before. He’s just another continuity PM dishing out the goodies to insiders, friends and promoters of client state privilege
Thatcher would be mortally embarrassed by this charlatan
February 11, 2020
After Cameron ran away I thought it couldn’t be worse, after May burst into tears I thought it couldn’t get worse, now with Boris ……
February 11, 2020
JR
“UK needs positive action from the authorities to support the uplift in confidence generated by the result of the election.”
A confidence that lasted all of five minutes.
Johnson is ignoring us and trying to build the kind of Britain he and his European friends want, not the one we elected him to build.
The only thing to be confident of is slinging him and his lot out for good at the next election.
February 12, 2020
So far all the decisions made by this government could have been scripted by Teresa Mayā¦.appeasementā¦strong & stableā¦.remain means remainā¦same old same old
February 12, 2020
Boris listening to his girl friend, who sounds like she is a liberal.
What a huge disappointment for all of us who voted for what we thought we saw in this PM
February 12, 2020
Oh yes…just saw that his reshuffle will ā heal the riftā (yuk!) or some such. Bringing Remainers into the cabinet at the expense of Leavers. Great for negotiation!
Not to mention the deportation shenanigans. Foreign crims MUST be deported IMMEDIATELY….oh er….the judges wonāt let me.
And I really was hopeful……
February 12, 2020
The optimism of the country and the leave voters believing that we where entering a brave new world has sadly hit a brick wallā¦I suppose it our own fault thinking that things would change
February 12, 2020
1.4% represents a significant short fall from trend and the fact that not every single factor in the global economy is not entirely benign is , if you think about , quite obviously, a stupid excuse. Fiscal Policy is wildly stimulative by UK historical standards and by comparison with other economies . Borrowing is being allowed to grow to above 90 % of GDP a level that should terrify us all if we were not already horrified at Redwoods plan to print and distribute as much cash as we need ( IE writing off QE). So lie upon lie upon lie.
We are on course for the sort of loss of growth predicted and with tax rises borrowing and political winner-picking white planned just about every sane principle of good government has now been trashed by this populist shambles
Twas ever thus
February 12, 2020
The UK’s GDP went up by 1.4% while as released by the Office of National Statistics on 15 January 2029 CPIH went up by 1.4%, CPI by 1.3% and RPI by 2.2% for 2019.
I feel so much better. Not.
And when will Sir John possibly realise/accept that a rise in GDP does not translate straight into a rise in everyone’s purchasing power. When will he accept that, for example, the cleaning and restoring of properties flooded last year is counted as a positive increment to GDP.
Or is this type of sleight of hand something taught in top universities to future politicians?
Reply The GDP figure is real i.e. after allowing for inflation
February 12, 2020
Reply to reply: Thanks.
February 12, 2020
I’m surprised you didn’t mention the car industry, suffering as a result of the demonization of diesel which has had a dramatic effect on output. There is a lot of uncertainty in this sector. I cannot see how all cars having to be electric or hydrogen fuel cell powered in 12 years time is going to be viable. How is sufficient electricity going to be produced with the closure of conventional power stations? How are people going to afford them? As a retired person who does a modest mileage using a diesel powered car, I am going to run it into the ground.
February 13, 2020
The last quarter of 2019 was the time of maximum uncertainty over Brexit and it is small wonder that expenditure was reined in.
The next big challenge will come at the end of this year on completion of the transition. Barnier is making all sorts of threats against the City of London and the rights of UK financial services firms in Europe.
Just how much damage can the EU do to our financial services via Laws and Directives of the European Commission? To what extent can they control the conduct of continental firms and individuals?