The economy performed ever so slightly better than we thought last year. The Office for National Statistics has revised growth for the final quarter of 2010 back up to -0.5 per cent. Without the snow, the ONS says, growth would have been flat. That’s grim enough, but the full release confirms that disposable household income fell for the first time since 1981, a trend that is likely to continue this year.
But one fact that went largely unnoticed during Budget week is that the Office for Budget Responsibility is predicting a major economic bounce-back this quarter (see graph). It expects the Q1 figures (released on 27 April) to show that the economy grew by 0.8 per cent, a figure that already looks too optimistic, though George Osborne seems likely to avoid becoming known as the chancellor who took Britain back into recession.
There were some Conservatives who used to hope that Ed Balls’s warnings of a double dip would return to haunt him. But Balls changed tack with far more ease than anyone expected. In any case, the avoidance of a double dip is little consolation when the UK faces years of anaemic growth.