Outlook It seems to have become standard practice to question the Office for National Statistics’ data whenever it springs a surprise on the economy.
Which is what happened on Thursday when it kept faith with its initial – and disappointing – estimate of growth in the first quarter at 0.3 per cent rather than increasing it to 0.4 per cent.
As ever, the reasons for this were mixed, and some forecasters – including the Bank of England – still feel there’s scope for an upward revision. However, even if that happens, the numbers will still represent a disappointment. Were it not for relatively robust domestic demand, they would be much worse.
Exports fell by 0.3 per cent while imports surged by 2.3 per cent. The upshot being that net trade cut 0.9 percentage points off GDP, the biggest negative from this source for nearly two years.
The Conservatives rode to an election victory on the back of their claims of economic competence. These figures call that into question.
Two of the big economic goals of the last Government were to eliminate the deficit by the end of the Parliament, and to rebalance Britain’s economy.
We all know what happened to the first one. Stubbornly high Government borrowing has forced the forthcoming emergency budget.
While part of the reason for the UK’s poor export performance is down to the problems faced by some of our major trading partners, policy failure must bear part of the blame here too. There is precious little sign that the economy is being re-balanced in the ONS’s numbers and those claims to economic competence might need to be reassessed.Reuse content