Economic growth slows right down as UK sees longest ever fall in living standards

On Sunday, Boris Johnson said “the economy is going gangbusters”.

Today, the latest GDP figures show the British economy slowed right down in the first quarter of 2015, to a growth level of just 0.3% – compared to 0.6% in the last quarter of 2014.

The only sector where the economy was seen to grow is the service industry, with growth falling in production, construction and agriculture – painting a picture of a highly uneven economy emerging.

GDP stats in full: Construction DOWN 1.6% Production DOWN 0.1% Agriculture DOWN 0.2% Services UP 0.5% Overall 0.3% growth

— Mark Ferguson (@Markfergusonuk) April 28, 2015

This is now the fifth quarter in a row where growth has been smaller than the previous:

Q1 2014 0.9% Q2 2014 0.8% Q3 2014 0.7% Q4 2014 0.6% Q1 2015 0.3% -via @Iain_33 #Osborne:”Stick to the plan that’s delivering ..” #ToriesOut

— Bonnie Greer (@Bonn1eGreer) April 28, 2015

Ed Balls has slammed the figures, saying “working families can’t afford another five years of the Tories”. The Shadow Chancellor said that Labour’s plans to raise the minimum wage, cut business rates and increase apprenticeships will raise living standards. He said:

“While the Tories have spent months patting themselves on the back these figures show they have not fixed the economy for working families.

“Tory economic policy may be helping a few at the top but for most people bills have gone up faster than wages, which are down £1600 a year since 2010. And now these disappointing figures show economic growth slowing down too. The Tories just don’t understand that Britain only succeeds when working people succeed.”

The Trades Union Congress (TUC), meanwhile, has said that the last five years show the biggest fall in living standards since modern records began over half a century ago.

Using data from the Office of National Statistics, the TUC have calculated that RHDI (Real Household Disposable Income) is 0.6% lower for the period of 2010-2014 than it was for the five years previous.

With weak wage growth, cuts to in-work benefits, and tax rises negating tax cuts, the TUC claim that austerity has been a bigger driver of the fall in living standards then the economic recession. TUC general secretary Frances O’Grady said:

“Living standards have suffered the worst slump in at least half a century, leaving workers paying a heavy price for the government’s bad choices over the last five years. Austerity has failed, there’s still a major deficit, jobs are less secure and workers’ living standards have fallen.

“We need a government that understands how important pay growth and secure jobs are for a strong economy. If workers don’t have decent wages in their pockets to spend, businesses will struggle to invest and grow.”