Today's GDP figures are the final nail in the coffin of Osborne's credibility

This was all so avoidable, and entirely predictable.

The Q2 GDP growth figures from the ONS today were absolutely awful. Indeed, it was even worse than I had expected, having predicted -0.5 per cent against a consensus view of -0.2 per cent. The number came in at -0.7 per cent, which meant that the economy has had three successive quarters of negative growth - four of the last five and five of the last seven.

The economy has contracted by 1.4 per cent over the last three quarters and by 0.8 per cent since the Chancellor's autumn statement in 2010. The UK and Italy are the only two major countries in double dip recession and growth has been worse in the UK over the last year than it has been in Spain. The decline was broad-based, driven especially by a collapse in construction, which declined by 5.2 per cent in Q2, following 4.9 per cent on the previous quarter. Production fell by 1.3 per cent and services by 0.1 per cent. The IMF forecast of 0.2 per cent growth last week already looks overly optimistic - I have pencilled in -0.5 per cent or worse.

The coalition government took over an economy that was growing and by its inept policies it has killed growth stone dead. In interviews today, the Chancellor claimed he was “relentlessly focused” on sorting the economy out in the same way (presumably as King Canute was also determined to keep the tide back?). This, as ever, was worthless drivel because it is clear to all that the government's economic policy of austerity has failed and they have no clue what to do. The only fix is a fundamental U-turn with tax cuts, especially VAT, and big incentives for firms to invest and hire today – not in three years time. And what about youth unemployment? Policies to get infrastructure going are welcome but they won't have any effect for years; they should have been implemented when the government took office - now it is too late to get the economy growing again anytime soon. The Tory-led government still has no growth plan. If it does, let’s hear it.

The recession deniers were out in force saying that they couldn’t possibly be wrong, so there must be something wrong with the numbers. Of course, the main reason for this is that they supported the government's austerity nonsense and have egg on their faces. Just to make the point for the umpteenth time – the average data revision over the last 20 years is +0.1 per cent and over the last five years -0.1 per cent. In fact, the data revisions have generally been on the low side when the economy is slowing, as occurred in 2008. The statistical chances of the data being revised down further are the same as being revised up.

I do recall the 35 business leaders, who wrote to the Telegraph in October 2010 to say:

It has been suggested that the deficit reduction programme set out by George Osborne in his emergency Budget should be watered down and spread over more than one parliament. We believe that this would be a mistake. Addressing the debt problem in a decisive way will improve business and consumer confidence....There is no reason to think that the pace of consolidation envisaged in the Budget will undermine the recovery.

It hasn't exactly worked out that way. There has been no recovery, the economy is smaller today than it was when they put pen to paper, and business and consumer confidence has collapsed. It would be interesting to hear from them today on why it all went so badly wrong. Their silence is telling.

I now have every expectation that within a few days the UK will lose its AAA credit rating. I never thought it was actually a big deal as proved by the fact that when France was downgraded and bond yields fell. But Slasher Osborne set it up as something he should be judged against and so we should all do that.

This was all so avoidable, and entirely predictable. Our incompetent, part-time Chancellor and his advisers should be removed from office and put out to pasture. Ed Balls was right.

I am very angry that this visitation of evil spirits had to be foisted on the British people. We deserve better. This really is time for the biggest U-turn in history - that's what failure brings. I really have no sympathy for the fools – Cameron, Osborne and Clegg especially – who talked the economy down by claiming it was bankrupt and falsely comparing the UK to Greece.

No more excuses.

 

"Slasher" Osborne has been proved wrong yet again. Photograph: Getty Images

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

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A global marketplace: the internet represents exporting’s biggest opportunity

The advent of the internet age has made the whole world a single marketplace. Selling goods online through digital means offers British businesses huge opportunities for international growth. The UK was one of the earliest adopters of online retail platforms, and UK online sales revenues are growing at around 20 per cent each year, not just driving wider economic growth, but promoting the British brand to an enthusiastic audience.

Global e-commerce turnover grew at a similar rate in 2014-15 to over $2.2trln. The Asia-Pacific region, for example, is embracing e-marketplaces with 28 per cent growth in 2015 to over $1trln of sales. This demonstrates the massive opportunities for UK exporters to sell their goods more easily to the world’s largest consumer markets. My department, the Department for International Trade, is committed to being a leader in promoting these opportunities. We are supporting UK businesses in identifying these markets, and are providing access to services and support to exploit this dramatic growth in digital commerce.

With the UK leading innovation, it is one of the responsibilities of government to demonstrate just what can be done. My department is investing more in digital services to reach and support many more businesses, and last November we launched our new digital trade hub: www.great.gov.uk. Working with partners such as Lloyds Banking Group, the new site will make it easier for UK businesses to access overseas business opportunities and to take those first steps to exporting.

The ‘Selling Online Overseas Tool’ within the hub was launched in collaboration with 37 e-marketplaces including Amazon and Rakuten, who collectively represent over 2bn online consumers across the globe. The first government service of its kind, the tool allows UK exporters to apply to some of the world’s leading overseas e-marketplaces in order to sell their products to customers they otherwise would not have reached. Companies can also access thousands of pounds’ worth of discounts, including waived commission and special marketing packages, created exclusively for Department for International Trade clients and the e-exporting programme team plans to deliver additional online promotions with some of the world’s leading e-marketplaces across priority markets.

We are also working with over 50 private sector partners to promote our Exporting is GREAT campaign, and to support the development and launch of our digital trade platform. The government’s Exporting is GREAT campaign is targeting potential partners across the world as our export trade hub launches in key international markets to open direct export opportunities for UK businesses. Overseas buyers will now be able to access our new ‘Find a Supplier’ service on the website which will match them with exporters across the UK who have created profiles and will be able to meet their needs.

With Lloyds in particular we are pleased that our partnership last year helped over 6,000 UK businesses to start trading overseas, and are proud of our association with the International Trade Portal. Digital marketplaces have revolutionised retail in the UK, and are now connecting consumers across the world. UK businesses need to seize this opportunity to offer their products to potentially billions of buyers and we, along with partners like Lloyds, will do all we can to help them do just that.

Taken from the New Statesman roundtable supplement Going Digital, Going Global: How digital skills can help any business trade internationally

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