Once again the GDP figures show that continued real increases in public spending lie behind the changes in GDP.
Once again the media present a very distorted picture of what is happening. They say that Olympic tickets account for some of the faster growth – around 20% of it. They fail to tell us that increases in real public spending accounts for twice as much as the Olympic tickets, or 40% of it.
The 0.1% increase from manufacturing and 0.1% increase from water was offset by the 0.2% fall from construction. Services account for the 1% gains overall. These split 0.4% from the public sector, and 0.6% from various parts of the private sector, including hospitality related to the Olympics.
Why do most of the commentators persist in distorting what is happening.? Why don’t they point out that increases in real public spending have made a positive contribution to GDP as officially calculated all this year, and this quarter the gains are large. Some of the private sector service and manufacturing gains are the result of catch up from the previous quarter which enjoyed the extra bank holiday.