On the face of it a 0.2 per cent increase in the UK’s gross domestic product (more or less everything in the economy) for January to March might not look very exciting but it’s actually very good news for PM Gordon Brown and the Labour Party.
The numbers are counted by the Office of National Statistics and, for reasons best known to itself, they are produced very quickly. So the first estimate, which this is, only measures output of goods and services, about 40 per cent of the total. Expenditure and incomes are added in later which means that the figure is nearly always revised and usually upwards.
In this quarter, where activity was dented to a degree by the foul weather, manufacturing output rose by a healthy 0.7 per cent, suggesting that the export-led boomlet everyone has been hoping for from the weakening pound is finally on the way (or finally on the ONS radar, other sources have been noting it for months).
Retail, hotels and restaurants fell by the same amount, which won’t surprise anyone. Visits to anywhere were clobbered by the weather in January and this is the quarter in which people usually pull in their spending horns after Christmas.
But it still means the UK has had two quarters of growth (the dear old ONS first said there was 0.1 per cent growth in the previous quarter, subsequently revised to 0.4). This past quarter will certainly be revised up, maybe even as far as 0.5 per cent.
The Treasury’s Budget forecast was for 1-1.5 per cent GDP growth this year and such a revision would mean this figure is likely to be exceeded.
So Labour can claim that there are clear signs that Dr Brown’s economic medicine is working but, almost equally importantly, no evidence either that the economy is in robust enough health to withstand would-be Tory chancellor George Osborne’s threatened public sector amputations.
Not that he’s specified which limbs are for the chop.