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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Paul Nuttall is like his party: sad, desperate and finished

The party hope if they can survive until March 2019, they will grow strong off disillusionment with Brexit. They may not make it until then. 

It’s a measure of how far Ukip have fallen that while Theresa May faced a grilling over her social care U-Turn and Jeremy Corbyn was called to account over his past, the opening sections of Andrew Neill’s interview with Paul Nuttall was about the question of whether or not his party has a future.

The blunt truth is that Ukip faces a battering in this election. They will be blown away in the seats they have put up a candidate in and have pre-emptively retreated from numerous contests across the country.

A party whose leader in Wales once said that climate change was “ridiculous” is now the victim of climate change itself. With Britain heading out of the European Union and Theresa May in Downing Street, it’s difficult to work out what the pressing question in public life to which Ukip is the answer.

Their quest for relevance isn’t helped by Paul Nuttall, who at times tonight cast an unwittingly comic figure. Pressing his case for Ukip’s burka ban, he said earnestly: “For [CCTV] to work, you have to see people’s faces.” It was if he had intended to pick up Nigel Farage’s old dogwhistle and instead put a kazoo to his lips.

Remarks that are, written down, offensive, just carried a stench of desperation. Nuttall’s policy prescriptions – a noun, a verb, and the most rancid comment underneath a Mail article – came across as a cry for attention. Small wonder that senior figures in Ukip expect Nuttall to face a move on his position, though they also expect that he will see off any attempt to remove him from his crown.

But despite his poor performance, Ukip might not be dead yet. There was a gleam of strategy amid the froth from Nuttall in the party’s pledge to oppose any continuing payment to Brussels as part of the Brexit deal, something that May and Corbyn have yet to rule out.

If May does manage to make it back to Downing Street on 8 June, the gap between campaign rhetoric – we’ll have the best Brexit, France will pay for it – and government policy – we’ll pay a one-off bill and continuing contributions if need be – will be fertile territory for Ukip, if they can survive as a going concern politically and financially, until March 2019.

On tonight’s performance, they’ll need a better centre-forward than Paul Nuttall if they are to make it that far. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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