Is the UK’s Latest GDP Growth Really Worth a Credible Sob?
Sure, the new numbers show a small uptick, but that’s like a band‑age in a cyclone: it looks good on paper, but the real storm is still brewing.
What’s the Good News?
- Quarterly GDP jumped 0.3% in Q2, thanks in part to a hefty revision of April’s data (down to –0.1% rather than a supposed +0.3%).
- June itself saw a neat 0.4% bump.
- GDP per head rose 0.2%, catching a bit of the first‑quarter 0.6% climb.
- Tax hikes and other cost shocks from April seem to have steadied, so the economy looks less like a roller‑coaster and more like a snoring koala.
Why the Midas Touch Maybe Won’t Stick
- Overall growth is still feather‑thin – just 0.2‑0.3% a year on average per business survey, a drop from last year’s 1.1%.
- Consumer & business confidence are wobbling; inflation is climbing, and the autumn budget promises another big hammer blow.
- Government spending and “gross capital formation: other” (think inventory tweaks and asset acquisition tweaks) were the star performers, while good ol’ consumer spending and firm investment lagged behind.
Broader European Context
- Euro area growth slid from 0.6% to a paltry 0.1%.
- Germany and Italy reported –0.1% hits, while Ireland suffered a steeper –1.0%.
What This Means for the Future
We’re looking at a scenario where state meddling, more fire‑mowed public spending, extra borrowing, and possibly new taxes will not fire up sustainable growth.
In short: a modest GDP lift gives a breathing space, but the itch for a full‑blown recovery remains out of reach.
