GDP figures: Osborne has been the beneficiary of low expectations

The economy is still 1.3 per cent smaller than before the recession and the recovery remains the slowest since 1870s.

Solid but far from spectacular. That is probably the fairest description of how the economy performed in the final quarter of last year. The ONS's first estimate suggests that GDP rose by 0.7 per cent, below the 0.8 per cent measured in Q3, but enough to ensure that 2013 was the strongest year for growth since 2007, with output rising by 1.9 per cent. 

After fears of a triple-dip recession less than a year ago, the economy has enjoyed an unexpected bounceback. But it's important to remember that this remains the slowest recovery since the 1870s, with GDP still 1.3 per cent below its pre-recession peak (the US, by contrast, is 5.6 per cent above). To this, the Tories will reply that the UK suffered a bigger crash than any other major country, with GDP falling by 7.2 per cent from peak to trough. But as Larry Summers told George Osborne at Davos last week, "The deeper the valley you are in, the more rapidly you are able to grow."

In 2010, a genuine recovery was underway, with the economy growing 2.4 per cent in the 12 months to Q3 2010, but premature austerity, in the form of the VAT rise and the dramatic cut in infrastructure spending, ensured that growth was snuffed out. To meet the OBR's original 2010 forecasts, the economy would need to grow by 1.6 per cent each quarter between now and the election. But Osborne has been the beneficiary of low expectations. Before the post-2010 downturn, below-trend growth of 1.9 per cent would have been viewed as a dismal failure. 

The broader concern remains, as Vince Cable suggested in his lecture last night, that this is the wrong kind of recovery, one too reliant on debt-led consumption and house price inflation, rather than exports and investment. Of the 0.7 per cent rise in output in Q3, 0.6 per cent came from the services sector, with construction actually declining by 0.3 per cent. And, of course, contrary to what the Tories claimed last week, living standards are still falling, with prices (2 per cent) rising more than twice as fast as wages (0.9 per cent). So long as this remains the case, they will still struggle to rebut Labour's charge that this is a recovery for the few, not the many. 

George Osborne speaks on EU reform in London on January 15, 2014. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Matt Cardy/Getty Images
Show Hide image

What did Jeremy Corbyn really say about Bin Laden?

He's been critiqued for calling Bin Laden's death a "tragedy". But what did Jeremy Corbyn really say?

Jeremy Corbyn is under fire for describing Bin Laden’s death as a “tragedy” in the Sun, but what did the Labour leadership frontrunner really say?

In remarks made to Press TV, the state-backed Iranian broadcaster, the Islington North MP said:

“This was an assassination attempt, and is yet another tragedy, upon a tragedy, upon a tragedy. The World Trade Center was a tragedy, the attack on Afghanistan was a tragedy, the war in Iraq was a tragedy. Tens of thousands of people have died.”

He also added that it was his preference that Osama Bin Laden be put on trial, a view shared by, among other people, Barack Obama and Boris Johnson.

Although Andy Burnham, one of Corbyn’s rivals for the leadership, will later today claim that “there is everything to play for” in the contest, with “tens of thousands still to vote”, the row is unlikely to harm Corbyn’s chances of becoming Labour leader. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.