Really bad news today that the economy is in an even deeper recession than we thought. We’ve now had three quarters of recession in a row. The Chancellor’s been in charge two years, so eight quarters. In five of those eight the economy has shrunk. GDP is now lower than it was when the Tories came to power.
It’s a dismal record which gives little hope to people out of work and families struggling to make ends meet.
The figures out today show construction was by far the worst performing sector – a 5.2% drop in output. Steve (via Ben Chu) argued back in May that in Quarter 1 of this year, the collapse in public housebuilding pulled the construction sector into recession, and the economy with it.
With a further a 5 percent drop it’s hard to see how the same isn’t true again.
There is plenty the government can do to stimulate housebuilding: through reform, direct government investment or lifting the restrictions on councils investing.
Allowing housebuilding to continue to fall is a political choice.
While I’m on the subject of the economy:
- There seems to be a view among the commentariat that the economy doesn’t feel as bad as the numbers suggest. They should get out of London for a bit. You don’t have to go far – even in my South Eastern hometown more and more people are struggling and feel increasingly pessimistic about the future.
- If the Olympics provide an economic boost, just watch George claim that it’s in fact his careful stewardship which has led us back to growth. If there is no growth, then the Olympic disruption to travel and people staying away from work will be the excuse. None of it will wash anymore.