by Rachel Reeves
Throughout the phone hacking scandal, the chancellor has tried to keep his role in the “regrettable” appointment of Andy Coulson as the PM’s director of communications out of the spotlight. Despite being the one who allegedly recommended Coulson’s appointment, Osborne has done his best to bat away any responsibility for his role in that crisis.
Today, as the latest data show that GDP grew by just 0.2% in the second quarter of 2011, the chancellor is no doubt wishing he could be as slippery in evading responsibility for the staggeringly anaemic “recovery” that is now entrenched in the UK.
Growth of 0.2% in the second quarter of this year is a slow-down from growth of 0.5% in the first quarter, which in itself was only just enough to counter the contraction in the economy of 0.5% in the last quarter of 2010. Compare this to Q2 for last year, when the economy, in its third quarter of economic recovery, was growing at 1.1%, thanks to the decisive action from a Labour government that knew a strong recovery was critical to getting the country back on its feet and the deficit down.
Now, as a result of the too far, too fast approach of the government since May 2010, growth has continued to falter, a year and a half after the economy moved into recovery, and the economy is flat-lining. Three years after the peak of GDP before the recession started, output has not managed to recover by even half of the 6.4% that it fell since the first quarter of 2008. This recovery is turning out to be anaemic, as well as historically and internationally weak.
Today’s GDP figure of 0.2% is far below what the treasury needs if the economy is to meet its forecast for growth of 1.7% for this year. And let’s remember, that forecast has already been downgraded three times – the independent office of budget responsibility was forecasting growth of 2.3% for 2011 just a year ago.
