Five questions answered on the UK’s GDP growth

How is the economy fairing?

The UK’s GDP has seen its fastest growth for three years latest figures have revealed. We answer five questions on the statistics. 

How much has the UK’s economic output grown by? 

According to the Office for National Statistics (ONS) UK economic output rose by 0.8 per cent between July and September.

This is the best quarterly performance since 2010.

What other figures were released?

The ONS said production grew by 0.5 per cent, however this is 12.8 per cent off its 2008 level. Within this manufacturing improved by 0.9 per cent.

The service sector grew by 0.7 per cent and is now 0.6 per cent above its pre-crisis peak. This represents three-quarters of economic output. 

What has the government had to say about these latest figures?

Chancellor of the Exchequer George Osborne tweeted: "This shows that Britain's hard work is paying off & the country is on the path to prosperity."

While the Deputy Prime Minister Nick Clegg said the figures "show that we are firmly on the road to economic recovery".

And the experts?

The Institute of Directors' chief economist Graeme Leach told the BBC: "The outlook looks better than at any time since the onset of the financial crisis. Indeed, our members have more confidence in the economy than at any time since 2008.

"However, strong headwinds remain and the annual growth rate year on year is nothing to get too excited about yet. Though inflationary pressures are likely to remain benign, debt and inflation are rising faster than earnings.

"This stage of our economic recovery is likely to be short and sweet, instead of long and strong."

The director-general of the British Chambers of Commerce, John Longworth, said: "This is the highest quarterly increase we've seen in three years, so the economy is clearly moving in the right direction.

"But we are still behind a number of advanced economies, such as the US and Germany, that have managed to recover the output lost during the economic downturn.

So, how does the economy fair overall?

The economy remains 2.5 per cent below its pre-recession peak at the start of 2008, and 1.5 per cent ahead of the same period last year. 

On the road to recovery? Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

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

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