GDP grows by 0.3 per cent

The ONS figures show stagnation is still the name of the game.

The preliminary estimate for GDP growth in the first quarter of 2013 has come in at 0.3 per cent. That's higher than the vast majority of economists had predicted, coming in as it does against a consensus estimate of 0.1 per cent.

Clearly, the difference between growth of -0.1 and 0.1 per cent is where the real disconnect is in the political debate. If it were the first, then we would have been in a triple-dip recession. As it is, we aren't, and the chancellor will be able to begin a narrative of our slow return to growth. In fact, coming in at 0.3 per cent may even lead to a temptation to drop the "slow" part of that narrative. We're growing three times faster than the forecasts predicted! Break out the champagne!

And Osborne should allow himself a momentary pat on the back. Beating expecations, even vastly depressed expectations, is always a good thing. But even with today's news, the wider-scale conclusion is the same: Britain's growth is anaemic. In 2012, the economy shrank. In 2011, it grew less than one per cent. In 2013, NIESR predict that it will grow by slightly more than one per cent, and today's figures, annualised, are just 1.2 per cent growth. We won't have annual growth above two per cent until 2015.

That's disastrous on a number of levels. Our economic system is basically built around a paradigm of real economic growth in the two to three per cent range. We can handle short-term deviations from that norm, but the long-term trend must remain the same. Growth much below that isn't growth at all; it's stagnation by another name. On top of that, real GDP growth isn't the only figure we heard today; we also know the growth per capita. And in a country with a rising population like ours, we need to be growing just for that to stand still. With a population growing at around 0.6 per cent a year, that means this quarter's growth only "feels" like 0.15 per cent to any individual.

Lest you think this is just lefty attacks on Osborne, remember: I wrote much the same in February, when it seemed likely there would be a triple dip. The symbolic disconnect between recession and growth is too tempting, and too many people focus on it. The reality is, the British economy is going to be rubbish for years to come. Celebrating because it's marginally less rubbish than it might have been lies somewhere on the line between "blitz spirit" and "idiotic optimism".

Breakdown

So what's going on beneath the surface?

The GDP growth stems entirely from a growth in the service sector; that grew by 0.6 per cent in the last quarter, contributing 0.5 per cent to the overall GDP figure. That was offset by a massive fall in the construction sector, down 2.7 per cent – which knocked 0.2 per cent off the overall figure.

Those numbers show the discrepancy in the importance of the respective sectors; even more obviously, the contraction in the "Agriculture, forestry & fishing" sector, down 3.7 per cent, had no effect on the headline number. We are a service economy, and becoming more of a service economy every quarter.

Apart from that, one other figure jumps out from the release. The "government" sector, which shrunk by 0.9 per cent last quarter, grew by 0.5 per cent this quarter. That means it goes from contributing a 0.2 per cent contraction to the headline figure in Q4 2012 to adding 0.1 per cent to the headline figure this quarter. As the government has quietly put its deficit reduction plan on hold, shrinking PSNB by nominal amounts, it has been able to start spending on infrastructure. We're now seeing that effect.

An earlier version of this post confused quarterly and annual population growth. This has been amended.

GDP and main components. Figure: ONS

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Jeremy Corbyn has defied the odds and embarrassed his critics

The pundits were wrong, writes Liam Young. 

On Tuesday I said that Labour would need time to show any drastic improvement in nation-wide elections. With the results now clear I still hold to that premise. After a scary result in Scotland, a ‘holding on’ in Wales and a rather better than expected showing in England it is clear that the public has produced a mixed bag of results. But for Labour, something very interesting has happened.

Before the results were announced pundits were predicting roughly 200 seat losses for the Labour party across local councils. Some of Jeremy Corbyn’s strongest opponents suggested that Labour would lose councils in the South owing to the anti-austerity message being viewed as irrelevant. There was also the suggestion that Labour would gain votes in the heartland of the North where it already controlled a great number of seats. It seemed that the pundits were wrong on both counts.

One thing is clear and undeniable. Jeremy Corbyn’s Labour has defied the odds at this election. It looks like the party will lose no more than 30 council seats and that its vote share on 2015 will be up by roughly 4 per cent at the expense of the Tories. People will rightly say that this is depending on the standard the results are measured by.

But I think that John McDonnell made a convincing argument last night on exactly how to judge this performance. Given that many simply want to spend time speculating about Jeremy Corbyn’s leadership it seems entirely reasonable to measure Labour’s success based on the party’s movement since he became leader. As mentioned above if this is taken as the standard Labour has increased its share of the vote and has beat the Tories after being some 14 points behind in the polls just a few months ago.

Commentators were arguing even at the point of polls closing that Labour would lose control of key councils such as Southampton, Harlow, Carlisle and Nuneaton. Yes – everybody remembers Nuneaton. But these predictions proved false. Labour did not just hold on to these areas but in a great deal of them the party increased its share of the vote and indeed its share of council seats. Labour has truly defied the odds across England.

The information that was shared in the weeks before the election on Thursday suggested that with Labour’s current position in the polls it would lose 170 seats. Some went as far as to suggest we would lose towards the 300 mark given the crisis Labour found itself enveloped in during the run up to voting. Opponents were kind enough to note that if we achieved parity with the Tory vote we would only lose 120 council seats.

While any loss is regrettable I have made my view clear on why Labour faced an uphill climb in these elections. Despite the rhetoric we have lost just over 20 seats. I agree with John McDonnell’s call this morning that it is time for the ‘begrudgers’ to ‘put up or shut up’. No wonder they are being so quiet.

Liam Young is a commentator for the IndependentNew Statesman, Mirror and others.