Why the Tories shouldn't get excited about "good" economic news

The economy might appear to be improving but forecasters predict a "triple-dip recession" and rising unemployment.

This week's economic news has prompted hope among the Tories that the tide is finally turning in their favour. Employment is at a record high, inflation is down to 2.2 per cent, its lowest level since November 2009, and borrowing has fallen to its lowest level for four years. The positive trend will continue next week when the Office for National Statistics (ONS) announces that the economy finally returned to growth in the third quarter (the National Institute of Economic and Social Research, for instance, has predicted growth of 0.8 per cent). Team Osborne hope that all of this will allow them to tell a plausible story of recovery.

However, it's worth pointing out several inconvenient truths. First, the next set of growth figures will be artificially inflated by the bounce back from the extra bank holiday in the previous quarter (which reduced growth by an estimated 0.5 per cent) and by the inclusion of the Olympic ticket sales (which are expected to add around 0.2 per cent to GDP). So, if the ONS announces that the economy grew by 0.8 per cent in the third quarter, the underlying rate of growth will be just 0.1 per cent.

Worse, many expect the economy to contract in the fourth quarter (what our economics editor David Blanchflower has termed a "triple-dip recession"). Bank of England MPC member Martin Weale has warned: "The Jubilee depressed output in the second quarter so you get an automatic bounce back. But if we talk about underlying growth then I think the economy is flat. I certainly would not say there is no risk of [a triple-dip recession] happening." Martin Beck, UK economist at Capital Economics, told the Today programme last week: "we expect the economy to start contracting again in the fourth quarter."

On employment, the picture is similarly mixed. As I noted when the most recent figures were published on Wednesday, 59 per cent of the 212,000 jobs created in the last quarter are part-time and nearly half (101,000) are in London, suggesting that the labour market benefited from a temporary Olympics effect. Adequately paid, full-time employment is still remarkably hard to come by. Of the new jobs created over the last three months, one in three offer fewer than 15 hours week a work, while 54 per cent offer fewer than 30 hours. A near-record 1.4 million people are working part-time because they can't find full-time jobs. It's also worth noting that most forecasters expect unemployment to rise significantly next year as further spending cuts, a lack of growth and rising productivity restrict job creation. The CBI, for instance, predicts that unemployment will increase by nearly 200,000 to 2.7m.

Finally, the deficit. While September's figures were better-than-expected, borrowing so far this year remains £2.7bn (4.2 per cent) higher than in the same period last year and George Osborne is still expected to miss his annual target by £5-10bn. The Chancellor aims to borrow no more than £121bn this year, but in the first six months of 2012 he's borrowed £65.1bn. As a result, when he delivers his autumn statement on 5 December, Osborne will likely be forced to postpone his goal of eliminating the structural deficit (originally scheduled for 2015) for a third year - to 2018. Having once hoped to offer significant cuts in taxation at the next election, the Tories will only be able to promise yet more austerity.

Chancellor George Osborne speaks at the Conservative conference in Manchester earlier this month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The most terrifying thing about Donald Trump's speech? What he didn't say

No politician uses official speeches to put across their most controversial ideas. But Donald Trump's are not hard to find. 

As Donald Trump took the podium on a cold Washington day to deliver his inauguration speech, the world held its breath. Viewers hunched over televisions or internet streaming services watched Trump mouth “thank you” to the camera, no doubt wondering how he could possibly live up to his deranged late-night Twitter persona. In newsrooms across America, reporters unsure when they might next get access to a president who seems to delight in denying them the right to ask questions got ready to parse his words for any clue as to what was to come. Some, deciding they couldn’t bear to watch, studiously busied themselves with other things.

But when the moment came, Trump’s speech was uncharacteristically professional – at least compared to his previous performances. The fractured, repetitive grammar that marks many of his off-the-cuff statements was missing, and so, too, were most of his most controversial policy ideas.

Trump told the crowd that his presidency would “determine the course of America, and the world, for many, many years to come” before expressing his gratefulness to President Barack Obama and Michelle Obama for their “gracious aid” during the transition. “They have been magnificent," Trump said, before leading applause of thanks from the crowd.

If this opening was innocent enough, however, it all changed in the next breath. The new president moved quickly to the “historic movement”, “the likes of which the world has never seen before”, that elected him President. Following the small-state rhetoric of his campaign, Trump promised to take power from the “establishment” and restore it to the American people. “This moment," he told them, “Is your moment. It belongs to you.”

A good deal of the speech was given over to re-iterating his nationalist positions while also making repeated references to the key issues – “Islamic terrorism” and families – that remain points of commonality within the fractured Republican GOP.

The loss of business to overseas producers was blamed for “destroying our jobs”. “Protection," Trump said, “Will lead to great strength." He promised to end what he called the “American carnage” caused by drugs and crime.

“From this day forward," Trump said, “It’s going to be only America first."

There was plenty in the speech, then, that should worry viewers, particularly if you read Trump’s promises to make America “unstoppable” so it can “win” again in light of his recent tweets about China

But it was the things Trump didn't mention that should worry us most. Trump, we know, doesn’t use official channels to communicate his most troubling ideas. From bizarre television interviews to his upsetting and offensive rallies and, of course, the infamous tweets, the new President is inclined to fling his thoughts into the world as and when he sees fit, not on the occasions when he’s required to address the nation (see, also, his anodyne acceptance speech).

It’s important to remember that Trump’s administration wins when it makes itself seem as innocent as possible. During the speech, I was reminded of my colleague Helen Lewis’ recent thoughts on the “gaslighter-in-chief”, reflecting on Trump’s lying claim that he never mocked a disabled reporter. “Now we can see," she wrote, “A false narrative being built in real time, tweet by tweet."

Saying things that are untrue isn’t the only way of lying – it is also possible to lie by omission.

There has been much discussion as to whether Trump will soften after he becomes president. All the things this speech did not mention were designed to keep us guessing about many of the President’s most controversial promises.

Trump did not mention his proposed ban on Muslims entering the US, nor the wall he insists he will erect between America and Mexico (which he maintains the latter will pay for). He maintained a polite coolness towards the former President and avoiding any discussion of alleged cuts to anti-domestic violence programs and abortion regulations. Why? Trump wanted to leave viewers unsure as to whether he actually intends to carry through on his election rhetoric.

To understand what Trump is capable of, therefore, it is best not to look to his speeches on a global stage, but to the promises he makes to his allies. So when the President’s personal website still insists he will build a wall, end catch-and-release, suspend immigration from “terror-prone regions” “where adequate screening cannot occur”; when, despite saying he understands only 3 per cent of Planned Parenthood services relate to abortion and that “millions” of women are helped by their cancer screening, he plans to defund Planned Parenthood; when the president says he will remove gun-free zones around schools “on his first day” - believe him.  

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland