run your cursor over the blue line to see each year’s GDP
Today the government announced a return to growth in the quarterly GDP figures to December, of a measly 0.1%. As the statistics are frequently adjusted later by 0.1% or sometimes more, this is really as good as saying nil growth. And that after six successive quarters of recession.
Interest rates are starting to rise. Quantitative easing is going to be reined back. It would be a miracle if the economy was able to get back into growth from here. Uniquely amongst all the countries of the G20, Britain is simply unable to grow.
One reason is that too much of our economy’s growth since 2001 was based on a banking bubble, which is now collapsing. The declared losses to date could end up being far higher than yet admitted to.
Th shakeout from this boom could be that Britain ends up back where we were nine years ago in 2001 when Labour won their second term, which is when all the trouble started. But now with a far smaller manufacturing sector than we had in 2001.
Our $-denominated GDP reached $2.77 trillion in 2007, but that was the top. It must currently be a lot nearer to $2 trillion than $3 trillion. The Q3 2009 GDP figure was £315 billion. That is $500 billion US$,or annually $2 trillion.
The real story that this chart of UK GDP in $’s tells is the incredible growth path after 2001. The chart shows how the UK’s GDP in US$ doubled between 2001 and 2007.
It has fallen by 30% since then. If the recession kicks back in on the back of rising interest rates, and if the £ falls once more, we might find our $ economy halves in size back to where it was in 2001 before Blair and Brown allowed borrowing to surge and Britain’s debt-fuelled boom to run out of control.
Our credit card binge will be well and truly over.
On the brighter side, our remaining manufacturers would be able to compete once more. And politicians might remember what real jobs are all about. Maybe they’ll cut away the truly awful load of social regulation they have imposed on us, so we can finally get on with the job of real economy-building. A $2 trillion real economy would be more use to us, than a $3 trillion fantasy.
ONS Stats to December 2009. HERE. Look at the chart of government net debt in 2002, falling to a low of 30%c, and the rising to 60%c in 2009 excluding ‘financial interventions’. If only Brown had stuck to the spending targets he inherited from the Conservatives, we would have had a very strong position to face the rockier climes of 2008 and 2009. Right now we are still struggling to find a base. It must be a case of start from scratch, economically and politically.