The Tories’ bogus US growth comparison

Why the right is wrong to boast that Britain grew more than the United States.

The Tories have responded to today's US growth figures by proudly pointing out that the UK economy grew more than the US (0.5 per cent vs. 0.4 per cent) in the first quarter of this year.

But this is an entirely bogus comparison for one obvious reason.

While the British economy shrank by 0.5 per cent in the previous quarter, the US economy grew by 0.8 per cent. Thus, the US experienced real growth in Q1, while the UK merely recovered the lost output of the previous quarter (although I'm being too kind to George Osborne, as I'll explain below).

Thanks to Labour's fiscal stimulus and the Bank of England's ultra-loose monetary policy, the UK economy grew at a faster rate (1.8 per cent) over Q2 and Q3 2010 than the US economy (1.1 per cent). But the coalition's austerity measures (most obviously the reckless VAT rise) and the resultant collapse in consumer confidence mean that the UK economy has flatlined over the past six months while the US economy has expanded by 1.2 per cent.

For the government to accuse Ed Balls of "hysteria" when he points out as much is merely another sign that they have lost the argument.

Incidentally, I, like most people, understated how bad the Q1 figures were on Wednesday. It is not accurate to say that the economy has recovered all of the output that it lost in Q4. As Sunder Katwala points out, "a 0.5 per cent increase on the reduced figure doesn't make up for the 0.5 per cent fall from from a higher base". For once, I was too soft on Osborne.

George Eaton is political editor of the New Statesman.

New Statesman
Show Hide image

Quiz: Can you identify fake news?

The furore around "fake" news shows no sign of abating. Can you spot what's real and what's not?

Hillary Clinton has spoken out today to warn about the fake news epidemic sweeping the world. Clinton went as far as to say that "lives are at risk" from fake news, the day after Pope Francis compared reading fake news to eating poop. (Side note: with real news like that, who needs the fake stuff?)

The sweeping distrust in fake news has caused some confusion, however, as many are unsure about how to actually tell the reals and the fakes apart. Short from seeing whether the logo will scratch off and asking the man from the market where he got it from, how can you really identify fake news? Take our test to see whether you have all the answers.

 

 

In all seriousness, many claim that identifying fake news is a simple matter of checking the source and disbelieving anything "too good to be true". Unfortunately, however, fake news outlets post real stories too, and real news outlets often slip up and publish the fakes. Use fact-checking websites like Snopes to really get to the bottom of a story, and always do a quick Google before you share anything. 

Amelia Tait is a technology and digital culture writer at the New Statesman.