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The graph Osborne doesn’t want you to see

December 22, 2011 12:22 pm

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Mark Ferguson

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There’s been some complacency and some crowing today as economic growth was revised up from 0.5% to 0.6% for the last quarter, yet don’t be fooled. The impact of Osborne’s economic policies is stark – growth in the year since his spending review is just ONE SIXTH of the growth acheived in the 12 months beforehand. Labour achieved 3% growth, Osborne has achieved just 0.5%.

Bill Lockhart

Another embarrassingly simplistic graphic, Mark. Unworthy of a political site which aspires to be taken seriously.
Anonymous

Always the Tories who complain about the graphs. Carp away. Facts are facts. Growth has slumped under Osborne.
- Anonymous
  
  “
  Carp away. Facts are facts. Growth has slumped under Osborne.
  
  I am sorry but that statement is utterly and demonstrably wrong.
  
  See the World Bank Graph of GDP Growth from 1960 on..
  
  http://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_kd_zg&idim=country:GBR&dl=en&hl=en&q=uk+gdp+growth
  
  and also the attached Quarterly figures from the Guardian..
  
  http://www.guardian.co.uk/news/datablog/2009/nov/25/gdp-uk-1948-growth-economy
  
  I quote a few of the most recent Quarterly growth figures pre Conservatives and then since.
  009 Q1-2.12009 Q2-0.72009 Q3-0.32009 Q40.62010 Q10.42010 Q21.12010 Q30.62010 Q4-0.52011 Q10.52011 Q202011 Q3
  
  So I am afraid Growth has RISEN under the Conservatives.
  - Rosemariemorgan
    
    er the World bank graph only goes up to 2010. as far as I can see that supports the article. GDP was rising under Labour. of course you could argue that Cameron was also in power in 2010, but as you know it took time for the Tory fiscal policies to take effect. True, facts are facts. and statistics are whatever you want them to be. so no reason for either party to go patting themselves on their backs
  - Dave Postles
    
    Q4 2009 – Q4 2010 2.7%
    12 months post-spending review looks like 0.6%
    No?
    - Anonymous
      
      Yes
      
      But as it is still growth and the previous years 2008-9 showed a contraction.. growth has continued.
      
      Like all statistics, it depends where you start of course but adding the numbers together for the past 5 years shows annual figures:
      
      2007 +2.5%
      2008 -3.1%
      2009 -2.5%
      2010 +1.6%
      2011 +1.1% (9 months only)
      
      (you could argue that a new Government has no impact at all for 6 months)
      
      So any claims that “Growth slumped under Osborne” are not borne by these figures.
      
      You could say: ” Economy collapsed under last years of Labour Government, only recovered when they lost power” – and based on the statistics that is true…
      - Dave Postles
        
        You could conversely argue that Labour’s stimulus endured six months into the Coalition’s period, up to the Autumn statement, as it usually takes six months for economic policy to work through, and in that case MF’s argument is valid. No?
      - Anonymous
        
        Dave
        
        No-one can argue logically from Quarterly numbers: they just wobble around too much.
        
        If you look at the annual ones and compare 12 months of 2010 and 9 months of 2011, the growth figures to date are an monthly average of 0.13% in 2010 and an average of 1.2% in 2012..
        
        That is hardly a “slump”…
        
        (I will remind you the entire world had a recession in 2007-8 – as Gordon Brown kept telling us – and Japan ‘s earthquake knocked world economic output in Q2 2011)
      - Dave Postles
        
        I’m not relying on quarterly numbers. Your statements above were incorrect. As to: ‘and an average of 1.2% in 2012′ – that defeats my poor mental abilities. Are you projecting an annualized figure of 12 x 1.2% for 2012? I wish that I was as clairvoyant! George Soros would be on the blower like a flash.
      - Anonymous
        
        One thing is for sure.
        
        We’re arguing over details.
        
        And yes: I expect Q4 2011 Growth to be around 0.5% giving 1.6% for the year.. as 2010.
        
        Which proves my point. The article is rubbish.
      - Peter Barnard
        
        @ Madasa,
        
        The article may be “rubbish” (being a somewhat restrained person myself, I would describe it as “flawed”) ; however, if we take a look at the GDP series for quarter vs corresponding quarter the year before, we find :
        
        2010 Q2/2009 Q2 : 2.51 per cent growth
        2010 Q3/2019 Q3 : 2.97 per cent growth
        2010 Q4/2009 Q4 : 1.71 per cent growth
        2011 Q1/2010 Q1 : 1.72 per cent growth
        2011 Q2/2010 Q2 : 0.58 per cent growth
        2011 Q3/2010 Q3 : 0.48 per cent growth
        
        (2009 Q2 was the quarter when the economy bottomed out).
        
        This suggests to me a declining trend in annual growth. Furthermore, given that population growth is around 0.6 per cent per annum, on GDP per capita, annual growth was flat in 2011 Q2 and minus 0.1 per cent in 2011 Q3.
      - Anonymous
        
        Peter
        
        BUT
        When you get turning points from -ve to +ve the rate of change in output is always very large - by definition…
        
        So any comparison with 2008/9 when the economy was in recession will produce big numbers..
        
        But your last para “annual growth was flat in 2011 Q2 and minus 0.1 per cent in 2011 Q3.”
        basically confirms that “slump” was a gross exaggeration…
      - Dave Postles
        
        ‘And yes: I expect Q4 2011 Growth to be around 0.5% giving 1.6% for the year.. as 2010. ‘
        Then you are alone, because all the economic commentators are forecasting 0%, because the restocking for Q3 will have finished; and for Q1 and Q2, there is a strong possibility of recession.
      - Dave Postles
        
        Q1 and Q2 2012.
      - Dave Postles
        
        You can’t look at the 12 months of 2010 and 9 months of 2011. You have to make a decision to divide it by parties in government. Then you have to factor in the period of sustained stimulus. Every credible economic commentator reckons that the economy is flatlining. Labour began the recovery, but Osborne has wasted it. It’s obvious.
      - http://twitter.com/Newsbot9 Newsbot9
        
        Confidence factors work a LOT quicker, and the Tories killed off confidence.
      - Dave Postles
        
        (you could argue that a new Government has no impact at all for 6 months)
        which seemingly defeats your own argument, as the first six months were continued growth up to Nov 2010?
      - Dave Postles
        
        ” Economy collapsed under last years of Labour Government, only recovered when they lost power”
        No it’s not; growth resumed in Q4 2009 and Q1 2010.
- Bill Lockhart
  
  I’m not a Tory. I’m a voter.
  How’s growth doing in the rest of Europe?
http://twitter.com/RodericHoward Roderic Howard

On the eve of the general election I had a discussion with an employee of a business federation, the chap suggested things will probably get better for us (I have business interests) if the Tories won. After the Tories destroyed our industrial base during the 80s could they be trusted to do the right thing this time?

Unfortunately not. 100,000s are being thrown out of work. Business confidence is shattered. Banks aren’t lending and the private sector, appearing not to have read the Osborne/Cameron script, is unable to respond.

And revised quarterly growth figures, up fractionally from 0.5% to 0.6% are supposed to be a cause for celebration.

You couldn’t make it up.
- Anonymous
  
  Then again labour did sod all to help us rebuild our base did they.
  - Dapper Dan
    
    This Conservative/Labour ping pong shows narrow minds.
    Business pulls the strings whichever of the two are in. That’s always going to happen with these two dinosaurs. A radical change is needed where money cannot and does not wield the power of influence over the ruling classes.
  - Andian59
    
    Labour did sod all did I hear you say. What after 18 years of tory misrule and blatantly turning us into a service country. I would suggest that it would take generations to reverse such policies and even further virtualy impossible. The only alternative was to employ people in the public sector in usefull and quite often secure untill this lot got in jobs. Now this shower are trying to portray those in the public sector as the bad guys maligning people who want to work but who are being made unemployed with little chance of securing private sector work. It is a farce we always have scapegoats last time the miners and of course always the unemployed and now anyone who has dared to become a public sector worker. Well I have news for these right wing idiots you cannot have it everyway and the ones where the blame needs to be laid are those speculating with millions and even billions of pounds every day. But oh no we cannot blame them as they earn too much money to be responsible for this countries problems and yet we are still giving into their demands. The hypocracy is tangible however I do not thing the masses will keep being put upon in this way.
  - http://twitter.com/RodericHoward Roderic Howard
    
    Well, didn’t Margaret Thatcher claim Tony Blair as her heir?
    - Anonymous
      
      yep sadly the two of them have left us in this bloody mess, and that idiot in America, the saying as daft as Brush should now read as daft as a bush.
- Dave Postles
  
  … and we’re selling off our industrial heritage again.
  
  http://www.savewedgwood.org/
  - http://twitter.com/RodericHoward Roderic Howard
    
    Yep, the potteries have gone to pot.
Dave Postles

The article Osborne & Little did not wish you to see

http://www.guardian.co.uk/business/2011/dec/22/george-osborne-family-business-losses
Anonymous

I’d like to be hearing more about this from the two Eds. They should be working out how much that lost growth is costing the Treasury and accusing Osborne of frittering away money.

The Tories have their analogy about the maxed-out credit card; I know it doesn’t stand up, but the voters have bought it. We need a similar soundbite about Osborne’s wastefulness, and it could be something along these lines: faced with a massive debt to pay off, Osborne wants to go part-time at work (that’s effectively what Britain is doing by leaving hundreds of thousands unemployed and allowing growth to stall). There might also be a chance to portray Osborne as wanting Britain to be a lazy country, in which it doesn’t matter if lots of people have no work. Instead of suggesting that the jobless are lazy, let’s suggest that the Government that put them out of work is lazy.

Not very snappy, I know, but I’d like to see our leading MPs attacking the Tories on wastefulness and laziness, because that’s the nature of their policies.
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Dave Postles

Gilts and low yields

http://www.guardian.co.uk/business/economics-blog/2011/dec/23/low-bond-yields-economic-weakness
Dave Postles

Inter-bank lending

http://www.guardian.co.uk/business/2011/dec/23/banks-money-european-central-bank
Peter Barnard

(to Madasa : boxes too small at bottom)

@ Madasa,

But that’s exactly what I did not do, Mr Fish : I did not compare a quarter in an expanding economy with a quarter in a declining economy – I started at the low point and all comparisons were in a period of an expanding economy– or what should have been an expanding economy (Q4 2010 being a significant exception).

When we came out the early 1990s recession (1991 Q3 being when the economy then bottomed out), the comparative figures are :

1992 Q3/1991 Q3 : 0.50 per cent
1992 Q4/1991 Q4 : 0.94 per cent
1993 Q1/1992 Q1 : 1.42 per cent
1993 Q2/1992 Q2 : 2.13 per cent
1993 Q3/1992 Q3 : 2.51 per cent
1993 Q4/1992 Q4 : 2.82 per cent

The pick-up in growth was small to begin with, but showed acceleration – exactly the opposite of what we have witnessed, so far, in this “recovery.”

Of course, Ken Clarke had no truck with the theory that you can’t borrow and spend your way out of recession … he borrowed at a rate not then seen since the end of the Second World War …
Dave Postles

BTW the current account deficit for the third quarter is the worst ever at £15.2bn – what export-led recovery? There are too many imports, although some no doubt are associated with restocking.
Anonymous

Could’ve fooled me, all you do is endlessly troll this site making pro-government and anti-Labour comments.

And you can be a Tory and a voter, obviously…
http://twitter.com/Newsbot9 Newsbot9

It’s dramatically better.

And true, with that level of denial you’re a LibDem.
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