Strong US growth raises the bar for Osborne
Osborne may soon no longer be able to boast that the UK is doing better than the US.
By George Eaton Published 27 October 2011 19:12
One of George Osborne's favourite boasts is that the UK economy has grown by more than the US economy this year. He consistently cites this fact as proof that austerity, not stimulus, is the way to grow the economy. This passage, from an Osborne op-ed for the Telegraph in August, is typical:
The US economy has grown more slowly than the UK economy so far this year, despite fiscal stimulus in the former and fiscal consolidation in the latter, showing that the problem is not too much fiscal responsibility.
His basic claim is not wrong. In the first two quarters of this year, the US economy grew by 0.3 per cent (0.1 per cent in Q1 and 0.2 per cent in Q2), while the UK economy grew by 0.5 per cent (0.4 per cent in Q1 and 0.1 per cent in Q2). (Although, of course, the UK economy shrunk by 0.5 per cent in the fourth quarter of 2010, while the US economy grew by 0.6 per cent.) But today's better-than-expected US growth figures have raised the bar for Osborne. In the third quarter, the US economy grew by a relatively impressive 0.6 per cent (or an annual rate of 2.5 per cent).
It's a figure that few economists expect the UK to match when the Q3 GDP figures are published on Tuesday. Growth in the second quarter was recently revised down by the ONS to just 0.1 per cent and the Q3 figure is unlikely to be much better.
The challenge is clear. Unless the Q3 growth figure is at least 0.5 per cent, Osborne will no longer be able to boast that the UK has grown by more than the US this year.
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25 comments
'I never said the riots were justified did I'
if they weren't justified then why is it the tories fault? yawn
'This is a man who took a recovery and due to his desire for austerity and low taxes ran the recovery into the ground'
like most u can't see there wasn't a recovery- u need to read up on variance in a statistic book to understand
'Compare it to the labour years of civil order'
we cann all spend money buying votes- not sustainable though
I think ure confused to the meaning of valid.
I also think ure mind is lika grasshopper;
''8 or 9 years...what comes will be catastrophic, and we will have riots, destitution, pain, and all manner of unpleasantness'
then u said people will conveniently forget it all. And I asked why 'conveniently', then u started on about all the ills, then i pointed out that people will often resist change because generally they are afraid of new ways (that went over your head as I used sarcasm)
Could go on, but it's boring dealing with someone who can't hold a propositional function in their head(that's concept to you) EVEN WHEN IT'S WRITTEN DOWN IN BLACK AND WHITE IN FRONT OF THEM
clown...
Call your nurse, your medication is very obviously wearing off.
@ sir michael
'and people will conveniently forget it all.'
people will forget that for '8 or 9 years...what comes will be catastrophic, and we will have riots, destitution, pain, and all manner of unpleasantness'
some of u guys are psychotic in the strict medical sense of the word... why would people conveniently forget... actually, forget it. Ure not worth it... yes dear, viva la revolucion!..
As for the article- well, lets look at the motivation- it must have been niggling that osborne could claim that, so much so that one data point and your there reminding us he CAN'T use that one anymore- flashbuck is right, it's like u want it to fail.... weird. mmm.
Why would people conveniently forget? Well I am just basing this on evidence.
We had labour (neo-tory labour, but still centre-right) for more than a decade and the worst civil unrest was the petrol blockade or John Prescots punch-up in Rhyl.
We've had the Tories for less than 18 months and already we've had complete civil breakdown, rioting, student protests, disabled people dying after being declared fit, prisons overcrowded, Downing street staff arrested by the police, corruption, and Eurohysteria.
It's astonishing how the left always gets blamed for the problems that occur when the right are in charge.
You obviously don't know Osborne. He'll present the figures to make them look good.
Good news, the Eurosummit seems to have gone down well with the Stock Markets round te World. So things could be looking up.
@george
Why omit the most important point?
The UK lags a couple of months behind the US. US growth will translate into UK growth in time. Paid for by US government borrowing.
Btw do you think the coalition should increase or decrease the rate of government borrowing? Which side of the Labour split do you take: Milibandwagon's or Balls up's view?
Osborne will simply pick some other set of figures or something, or boast that we have more competitive taxes (read: lower if you are rich) than most other places.
Having said that as much as we all might dislike him, Osborne genuinely feels he is doing the right thing by destroying the national infrastructure, and his party did pick up more votes than any others. So let him get on with it in peace. When it's all over maybe the British public will understand that these incompetant monsters should never be allowed back in again, but based on the evidence so far I doubt it.
I predict 0% growth for next week.
Indoo is lagging far behind the Lisbon Treaty bandwagon, the one that was ditched in 2009.
The US is experiencing rising exports, it seems their makers are marching and dancing.
UK growth in the first three quarters 1.0% (0.1+0.4+0.5)
US growth 0.9% (0.1+0.2+0.6)
So Osborne can boast for another 3 months, lol.
@matt
Foxy, thought you had run off with the skulk after losing so many arguments. BTW, careful who your friends are if you dont want fleas.
Lisbon Treaty -- another Foxy straw man you doused in petrol? Isnt that the treaty Labour was going to hold a democratic reforendum on? You know "democracy" one member one vote.
Do you remember "gutless" Gordon incompetently failing to turn up to the signing of the Treaty in 2007 with a made up excuse pissing off most of the European leaders? Milibandwagon had to sign it instead. Not the greatest of moments.
It's almost as if The NS wants the UK economy to fail so it can scoff. Shameful.
I don's skulk Indoo, I leave that to you.
You seem to be unfamiliar with the 2007 pledge, why is that Indoo.
In many ways Cameron is being consistent, there was no referendum on the Single European Act or the Maastricht Treaty.
Don't forget Indoo, Osborne tried to lean on some of the rebels, and where did it get him?
yes dear. You're right, it's camerons fault the prisons are overcrowded. And the riots were justified because they were all unemployed and destitute, well except those who had jobs I mean. And under labour who want to charge only 6k per year it's clear the students would have welcomed that. And its camerons fault the police were taking money from hacks, and the Tories are mental for having a pop at Europe since they havent actually crasghed the global economy yet.
Ure right- now print up your ideas and we can all get leafletting...
I think Stu shouldn't hide behind the idea consumer spending is solely powering the US economic expansion.
Before commenting, I think he needs to inhale deeply and digest yesterday's economic news.
The economic growth has been put down to three main reasons.
1, Increase Business spending
2, Rising Exports
3, Consumer Spending
The biggest drag at the moment is the spending cuts initiated on a state level. It seems the Republican Governors are weaving their magic.
Indu wrote, "The UK lags a couple of months behind the US. US growth will translate into UK growth in time."
I haven't come across this causal relationship before. Can you point us to some data?
Awake!, stop being thick. Start reading what people actually say, not reading things as if you were a Daily Express editor. If you have no argument against what someone says trying to change what they say isn't a valid tactic. Nobody is as thick as you are pretending to be, so drop it.
I never said the riots were justified did I? The point, which you have to have gotten, because it's glaringly obvious, is that civil unrest is always worse under the Tories. Miners strikes, Toxteth and Brixton, the poll tax riots, the prison riots etc. Compare it to the labour years of civil order. Now we have the tories back, and lo and behold we have riots and lawlessness again.
I didn't say that it was Camerons fault the police were corrupt did I? The point is that Cameron employed Murdochs right-hand man in spite of knowing in advance the kind of things he had done. Several people written to Cameron and told him to keep that man out of our political system. Cameron ignored it.
And if you want to talk about crashing the economy then why the hell do you support Osborne? This is a man who took a recovery and due to his desire for austerity and low taxes ran the recovery into the ground.
Apparently the growth is due to increased consumer spending but how long will it last?! Xmas is coming up so hopefully if the snow doesn't get in the way we'll have alittle growth too eh?
Point?... don't be too critical yet it's a long game. Not to forget that the US OWES China nearly $2trillion... gonna take awhile to pay that off.
This time last year, Boy George was constantly telling us that "it`s all Labour`s fault, we inhertited a mess". Not long afterwards, we had lots of snow, this provided Mr Osbourne with another scapegoat. In recent months the Eurozone has been his latest attempt at shifting the blame.
No matter how much the bar is raised, I`m sure the Chancellor will be smart enough to find more pathetic excuses for the poor state of our economy.
The eurozone does play a big part in all this so 'shifting the blame' isn't exactly true.
Oh Gideon.
Should you not be aware, Scapegoating is not a policy to cure the financial crisis.
@Lady J - Scapegoating has worked marvelously on the governments programs for welfare reform and the governments attempts to revoke the human rights act so it can abuse its own citizens (getting the British turkeys to vote for Christmas, in other words). What makes you think this won't work in the treasury?
Sure, what comes will be catastrophic, and we will have riots, destitution, pain, and all manner of unpleasantness. But in 8 or 9 years or so they can get up and say it "was a price worth paying", and people will conveniently forget it all.