Triple dip remains successfully avoided in GDP second estimate

Stagnation continues, writes Alex Hern.

The second estimates of GDP growth in 2013 is out, and it is unrevised at 0.3 per cent; the triple dip remains successfully avoided. On top of that, the senior economic advisor to Ernst and Young's ITEM club, Andrew Goodwin, argues that:

It still looks as if Q2 growth will be firm and possibly even stronger than Q1. The monthly data shows service sector output 0.5% above the Q1 average in March and with the production and construction data showing similar trends, this provides a solid springboard for Q2 GDP. Indeed, activity would have to fall back significantly through the quarter to generate a weaker outturn than Q1.

Source: ONS

Even while positive information is coming out about the likely prospects of this current quarter, the picture which is being drawn about the last quarter is getting gloomier. It's becoming clear that the quarter was positive largely due to a contribution from stockbuilding – businesses overproducing in order to build up their reserves. There was little rise in consumer spending, and investment and net exports actually fell.

But a warning. That fact doesn't mean that we were "really" in a recession, any more than the fact that the 2012 double-dip was largely due to declining oil and gas revenues means that that doesn't "really" exist.

Britain has been hovering between positive and negative growth for over a year now. That inevitably means that there will be seemingly-important distinctions which come down to a mere statistical fluke. But that's not a bug of the system, it's a feature: what it tells us its that we aren't in recession or growth, but stuck in that zone we call stagnation. That's been true for too long, and today's figures show no change there. (And yes, you have heard me banging this drum before). As Goodwin concludes:

We are still optimistic that the momentum will build, but this data reinforces the idea that this recovery is going to be a long, hard, slog.

Photograph: Getty Images

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

Getty Images.
Show Hide image

Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.