This is the weakest possible recovery

Many forecasters now expect growth to be just 1.3 per cent in 2011, down from the original OBR forec

At the beginning of the week, the CBI lowered its UK forecast for 2012 from 1.7 per cent to 1.3 per cent and continues to expect a lacklustre 2.2 per cent in 2012, which contrasts with the Office for Budget Responsibility's (OBR) current forecast of 1.7 per cent (already down from the 2.6 per cent it forecast before the June 2010 Budget). The CBI's downgrade is not surprising, given the poor results from the CBI Industrial Trends Survey, which found for the first time in two years that optimism regarding the general business situation fell among UK manufacturers.

Then the National Institute of Economic and Social Research (NIESR) lowered its growth forecast to 1.3 per cent in 2011 and 2.0 per cent in 2012, with unemployment forecast to rise from 7.9 per cent in 2011 to 8.3 per cent in 2012. NIESR's latest forecast of growth of 1.3 per cent in 2011 is half the rate of growth (of 2.6 per cent) forecast by the OBR in June 2010, before George Osborne's first Budget. NIESR said: "[T]he public finances will not improve as quickly as the OBR expects. Weaker growth and, in particular, weak consumer spending, in the short term, are behind this. Public-sector borrowing will shrink by only 1 per cent of GDP in 2011-2012. The Chancellor will miss his primary target of balancing the cyclically adjusted current Budget by 2015-2016 by around 1 per cent of GDP. The Chancellor has time to address this and further consolidation should not be introduced now. Indeed, it remains our view that in the short-term fiscal policy is too tight and a modest loosening would improve prospects for output and employment with little or no negative effect on fiscal credibility."

Then there was that horrid CIPS/PMI reading for manufacturing, which signalled contraction in the sector for first time in two years in July, as new orders declined at the fastest rate since May 2009. The weaker performance of the sector impacted on the labour market, as manufacturers lowered employment for the first time in 16 months. At 49.1 in July, down from a revised 51.4 in June, the survey posted its weakest reading since June 2009. David Noble at the Chartered Institute of Purchasing and Supply argued: "Alarm bells are ringing or the UK manufacturing sector, which has seen conditions deteriorate rapidly since the start of the year."

At his Mansion House speech on 15 June 2011, Slasher claimed, "The British economy is recovering. Output is growing . . . Stability has returned. Britain is on the mend." It doesn't exactly look that way does it? A couple of months turns out to be a really long time in economics.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Why the Liberal Democrats by-election surge is not all it seems

The Lib Dems chalked up impressive results in Stoke and Copeland. But just how much of a fight back is it?

By the now conventional post-Brexit logic, Stoke and Copeland ought to have been uniquely inhospitable for the Lib Dems. 

The party lost its deposit in both seats in 2015, and has no representation on either council. So too were the referendum odds stacked against it: in Stoke, the so-called Brexit capital of Britain, 70 per cent of voters backed Leave last June, as did 62 per cent in Copeland. And, as Stephen has written before, the Lib Dems’ mini-revival has so far been most pronounced in affluent, Conservative-leaning areas which swung for remain. 

So what explains the modest – but impressive – surges in their vote share in yesterday’s contests? In Stoke, where they finished fifth in 2015, the party won 9.8 per cent of the vote, up 5.7 percentage points. They also more than doubled their vote share in Copeland, where they beat Ukip for third with 7.3 per cent share of the vote.

The Brexit explanation is a tempting and not entirely invalid one. Each seat’s not insignificant pro-EU minority was more or less ignored by most of the national media, for whom the existence of remainers in what we’re now obliged to call “left-behind Britain” is often a nuance too far. With the Prime Minister Theresa May pushing for a hard Brexit and Labour leader Jeremy Corbyn waving it through, Lib Dem leader Tim Farron has made the pro-EU narrative his own. As was the case for Charles Kennedy in the Iraq War years, this confers upon the Lib Dems a status and platform they were denied as the junior partners in coalition. 

While their stance on Europe is slowly but surely helping the Lib Dems rebuild their pre-2015 demographic core - students, graduates and middle-class professionals employed in the public sector – last night’s results, particularly in Stoke, also give them reason for mild disappointment. 

In Stoke, campaign staffers privately predicted they might manage to beat Ukip for second or third place. The party ran a full campaign for the first time in several years, and canvassing returns suggested significant numbers of Labour voters, mainly public sector workers disenchanted with Corbyn’s stance on Europe, were set to vote Lib Dem. Nor were they intimidated by the Brexit factor: recent council by-elections in Sunderland and Rotheram, which both voted decisively to leave, saw the Lib Dems win seats for the first time on massive swings. 

So it could well be argued that their candidate, local cardiologist Zulfiqar Ali, ought to have done better. Staffordshire University’s campus, which Tim Farron visited as part of a voter registration drive, falls within the seat’s boundaries. Ali, unlike his Labour competitor Gareth Snell and Ukip leader Paul Nuttall, didn’t have his campaign derailed or disrupted by negative media attention. Unlike the Tory candidate Jack Brereton, he had the benefit of being older than 25. And, like 15 per cent of the electorate, he is of Kashmiri origin.  

In public and in private, Lib Dems say the fact that Stoke was a two-horse race between Labour and Ukip ultimately worked to their disadvantage. The prospect of Nuttall as their MP may well have been enough to convince a good number of the Labour waverers mentioned earlier to back Snell. 

With his party hovering at around 10 per cent in national polls, last night’s results give Farron cause for optimism – especially after their near-wipeout in 2015. But it’s easy to forget the bigger picture in all of this. The party have chalked up a string of impressive parliamentary by-election results – second in Witney, a spectacular win in Richmond Park, third in Sleaford and Copeland, and a strong fourth in Stoke. 

However, most of these results represent a reversion to, or indeed an underperformance compared to, the party’s pre-2015 norm. With the notable exception of Richmond’s Sarah Olney, who only joined the Lib Dems after the last general election, these candidates haven’t - or the Lib Dem vote - come from nowhere. Zulfiqar Ali previously sat on the council in Stoke and had fought the seat before, and Witney’s Liz Leffman and Sleaford’s Ross Pepper are both popular local councillors. And for all the excited commentary about Richmond, it was, of course, held by the Lib Dems for 13 years before Zac Goldsmith won it for the Tories in 2010. 

The EU referendum may have given the Lib Dems a new lease of life, but, as their #LibDemFightback trope suggests, they’re best understood as a revanchist, and not insurgent, force. Much has been said about Brexit realigning our politics, but, for now at least, the party’s new normal is looking quite a lot like the old one.