Osborne should beware of a triple-dip recession

The government shouldn't assume that "the good news will keep coming".

One can hardly blame the government for seeking to convince voters that today's GDP figures prove that we're "on the right track". Growth of 1 per cent in the third quarter, the highest quarterly growth rate since 2007, is superficially impressive (the bounce back from the bank holiday added around 0.5 per cent, while Olympic ticket sales added 0.2 per cent) and makes it easier for George Osborne to argue that the economy is "healing".

But to borrow Cameron's phrase from yesterday, the government shouldn't assume "that the good news will keep coming". A significant number of economists believe it is possible or even probable that the economy will contract in quarter four (in what our economics editor David Blanchflower has called a "triple-dip recession"). A combination of further spending cuts, rising energy prices, and recession in the eurozone means that growth is likely to remain anaemic or non-existent.

Vicky Redwood of Capital Economics, for instance, said:

As the Olympic effects unwind, it is still possible that the economy contracts again in Q4. Indeed, the business surveys have been painting a slightly gloomier picture, suggesting that underlying output is still stagnating or even falling slightly.

Chris Williamson of the data provider Markit, said:

The government will most likely make the most out of this good news, but unfortunately it is unlikely that the UK will see such a strong performance again for some time. In reality, the danger is that this figure fuels a misguided belief that the economy is on the mend, when in fact there is plenty of evidence to suggest that momentum is being lost again.

There is a real risk that a return to contraction might be seen again in the fourth quarter.

The irony is that a slightly weaker figure in this quarter, by reducing the risk of a slump in Q4, might have suited the government more.

Balloons featuring images of George Osborne at the Conservative conference in Birmingham earlier this month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The snowflake Daily Mail cries over free market capitalism taking our blue passports

UK, hun?

The poor old whining snowflakes at the Daily Mail have discovered that maybe it’s better to put the state above private companies after all.

They’ve run a ranty yet doleful lament on their front page about Britain’s “ruling class” (which they are definitely, definitely not part of, of course) showing its “hate” for “our country” by letting a Franco-Dutch firm make our post-Brexit blue passports:

“Today the Mail has a question for Britain’s ruling class: Why DO you hate our country, its history, culture and the people’s sense of identity?”

In a beautiful bit of irony, the £490m contract to make our grim new tickets to bigotry was awarded to Gemalto, a Franco-Dutch firm that beat the British-based De La Rue (lol) that also tried bidding for the contract.

The Mail’s complaint seems to be that the bloody Frogs shouldn’t be making our passports – the UK should be doing it instead. So, according to this logic, either the state should make them, or, to guarantee a private British firm winning the contract, the state should ignore free market forces?

Neither seem particularly in tune with the Mail’s usual preferences. Nor those of the Tory Brexiteers, for that matter.

Yes, this is part of European competition law – big public contracts like this have to be open to bids from across the EU. But right-wingers in this country don’t seem to mind when foreign companies run our railways (Greater Anglia, West Midlands and ScotRail franchises are majority-owned by the Dutch state company Abellio).

Looks like these over-sensitive social justice warriors want to have their cake and eat it. Political correctness gone mad.

I'm a mole, innit.