No double-dip recession, just flatlining

Industry, manufacturing and agriculture remain weak, while public sector output grows month-on-month

The think-tank NIESR has released its monthly estimate of GDP (PDF), and the good news is that we don't appear to be in a double dip recession; it estimates GDP grew by 0.1 per cent in the three months to March.

The bad news:

At present the UK economy can best be described as ‘flat’. We expect the UK’s economic recovery to take hold in 2013.

Indexed to 2008 levels, the public sector remains healthy, having grown in output every month in the last year, despite the efforts of the government to "rebalance" the economy. Other areas aren't feeling so strong, though, with industrial output at 90.2 per cent of 2008 levels, and agriculture at 80.4 per cent.

In addition, the ONS released the latest figures on manufacturing today, and Richard Exell writes on them at Touchstone:

Today’s figures for output in the production industries are genuinely disappointing. I wouldn’t emphasise the disastrous Index of Production results (3.8 points down from January 2011) which are quite erratic, so much as the Index of Manufacturing. This is positive (a 0.3 point gain on 12 months ago) but terribly feeble – especially for what is supposed to be one of the bright spots of the recovery.

Construction is not yet the driver of a recovery. Credit: Getty

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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The economic slowdown is another reason Theresa May called an early election

The Prime Minister has gone to the country before the living standards squeeze becomes too strong.

The recession that the Treasury and others forecast would follow the EU referendum never came. But we now have the clearest evidence yet of an economic slowdown. In the first quarter of 2017, GDP grew by just 0.3 per cent, down from 0.7 per cent in the previous three months and the slowest rate since the beginning of 2016.

For individuals, growth is now almost non-existent. GDP per capita rose by 0.1 per cent, continuing the worst living standards recovery on record. As the Resolution Foundation noted, GDP per capita is just 1.7 per cent above pre-crisis levels, compared to 16.3 per cent after the '90s recession and 24.5 per cent following the '80s recession. Higher inflation (owing to the pound's depreciation) and stagnant pay are hindering Britain's main source of growth: consumption (which accounted for 100 per cent of per capita growth in 2016).

As I recently noted in my column, the economic slowdown was another reason for Theresa May to call an early general election. A renewed living standards squeeze has begun but it is too early for much political damage to result.

It was precisely to deny prime ministers the chance to call an election at the most favourable moment that many argued for the introduction of fixed-term parliaments. Labour had little choice but to constent (though some argue Jeremy Corbyn should have forced Theresa May to hold a vote of no confidence). But today's figures will be cited as evidence of why future prime ministers should not be allowed to repeat May's trick.

George Eaton is political editor of the New Statesman.

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