ft.com/alphaville All times are London time
News
Dramatic, we know. But the ONS has confirmed the economy grew only 0.5 per cent in 2011′s first quarter after its 0.5 per cent fall in 2010′s last three months, and technically…
…That’s also already confirming a double-dip in GDP in absolute terms over the period, as the red-highlighted figures in the chart above show. (H/T Faisal Islam).
More worrying is the fact that sectors which previously pushed recovery forward are now definitely double-dipping.
Here’s Howard Archer of IHS Global Insight:
It was confirmed on the output side of the economy that growth was dragged down by a sharp drop in construction output, which still seems at odds with the relatively decent looking surveys during the period. Utilities output was also a drag. On a more positive note, the services sector saw a decent if unspectacular bounce back in growth after contracting in the fourth quarter and manufacturing output was resilient.
On the expenditure side of the economy, there was a very worrying drop of 0.6% in consumer spending in the first quarter, which reflected the pressure on spending power coming from elevated inflation and muted wage growth. Consumers also faced high unemployment, elevated debt levels, and a weak housing market.
Also worryingly, business investment plunged 7.1% quarter-on-quarter, which hardly fuels hopes that it can be a major growth driver going forward.
The news saw net trade make a decent positive contribution to growth as exports grew by a healthy 3.7% and imports fell 2.3%. This raises hopes that decent global growth and a competitive pound is finally helping the economy to achieve some much-needed re-balancing…
Indeed net trade added 1.7 per cent to growth in the first quarter.
But the thing with re-balancing is — the Treasury wants private investment to fill the hole that will be left by government cuts to spending. It’s not happening. In fact, government spending rose around 1 per cent. That’s partly a quirk of the way departments spend more at the turn of fiscal years, much as the VAT rise was especially nasty for household spending this time.
But none of this screams ‘escape velocity’, does it?
Related link: Putting the ‘stag’ in stagflation - FT Alphaville
WP Cumulus Flash tag cloud by Roy Tanck and Luke Morton requires Flash Player 9 or better.
Or select a previous briefing:
© The financial Times Ltd 2011 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
var oob = new Advert(AD_OOB);oob.init(); var adPop = new Advert(AD_CORPPOP);adPop.init(); var adRefresh = new Advert(AD_REFRESH);adRefresh.init(); clientAds.fetch(AD_MACROAD); clientAds.render(AD_MACROAD); clientAds.fetch(AD_MARKETINGRIB); clientAds.render(AD_MARKETINGRIB); clientAds.fetch(AD_TLBXRIB); clientAds.render(AD_TLBXRIB); clientAds.fetch(AD_DOUBLET); clientAds.render(AD_DOUBLET); clientAds.fetch(AD_INTRO); clientAds.render(AD_INTRO); clientAds.fetch(AD_HLFMPU); clientAds.render(AD_HLFMPU); clientAds.fetch(AD_HMMPU); clientAds.render(AD_HMMPU); clientAds.fetch(AD_TRADCENT); clientAds.render(AD_TRADCENT); clientAds.fetch(AD_MARKETING); clientAds.render(AD_MARKETING); clientAds.fetch(AD_BANLB); clientAds.render(AD_BANLB); clientAds.fetch(AD_MPUSKY); clientAds.render(AD_MPUSKY); clientAds.fetch(AD_MPU); clientAds.render(AD_MPU); clientAds.fetch(AD_WDESKY); clientAds.render(AD_WDESKY); clientAds.fetch(AD_NRWSKY); clientAds.render(AD_NRWSKY); clientAds.fetch(AD_ARTBOX); clientAds.render(AD_ARTBOX); clientAds.fetch(AD_FTHBOX); clientAds.render(AD_FTHBOX); clientAds.fetch(AD_TLBX); clientAds.render(AD_TLBX); clientAds.fetch(AD_FMBUT2); clientAds.render(AD_FMBUT2); clientAds.fetch(AD_LHN); clientAds.render(AD_LHN); clientAds.fetch(AD_MKTBX); clientAds.render(AD_MKTBX); clientAds.fetch(AD_OOB); clientAds.render(AD_OOB); clientAds.fetch(AD_POP); clientAds.render(AD_POP); clientAds.fetch(AD_BXBAR); clientAds.render(AD_BXBAR); clientAds.fetch(AD_DKTALRT); clientAds.render(AD_DKTALRT); clientAds.fetch(AD_DSKTICK); clientAds.render(AD_DSKTICK); clientAds.fetch(AD_PRNT); clientAds.render(AD_PRNT); clientAds.fetch(AD_INV); clientAds.render(AD_INV); clientAds.fetch(AD_MBATOP); clientAds.render(AD_MBATOP); clientAds.fetch(AD_MBABOT); clientAds.render(AD_MBABOT); clientAds.fetch(AD_MBALINK); clientAds.render(AD_MBALINK); clientAds.fetch(AD_SBHEAD); clientAds.render(AD_SBHEAD); clientAds.fetch(AD_FTNT); clientAds.render(AD_FTNT); clientAds.fetch(AD_1x1); clientAds.render(AD_1x1); clientAds.fetch(AD_CURRCON); clientAds.render(AD_CURRCON); clientAds.fetch(AD_CURRBOX); clientAds.render(AD_CURRBOX); clientAds.fetch(AD_CORPPOP); clientAds.render(AD_CORPPOP); clientAds.fetch(AD_REFRESH); clientAds.render(AD_REFRESH); clientAds.render(); setCurrentTime(1232358020000) Assanka.wp.processClipThis(); var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E")); try { var pageTracker = _gat._getTracker("UA-1874623-1"); pageTracker._trackPageview(); } catch(err) {} if (typeof Inferno == 'undefined') { var eid = (document.cookie.match(/EID=(\d+)/)) ? document.cookie.match(/EID=(\d+)/)[1] : 'unknown'; pageTracker._trackEvent('Debug events', 'sr23715', 'Load failure for '+eid); setTimeout(function() { var d = new Date(); document.getElementById('infdebug23715').innerHTML = (''); }, 1000); } var _sf_async_config={uid:14181,domain:"ft.com"}; _sf_async_config.sections = "alphaville"; _sf_async_config.authors = "Joseph Cotterill"; (function(){ function loadChartbeat() { window._sf_endpt=(new Date()).getTime(); var e = document.createElement('script'); e.setAttribute('language', 'javascript'); e.setAttribute('type', 'text/javascript'); e.setAttribute('src', (("https:" == document.location.protocol) ? "https://a248.e.akamai.net/chartbeat.download.akamai.com/102508/" : "http://") + "static.chartbeat.com/js/chartbeat.js"); document.body.appendChild(e); } var oldonload = window.onload; window.onload = (typeof window.onload != 'function') ? loadChartbeat : function() { oldonload(); loadChartbeat(); }; })(); Read Full Article »