WIREDGOV

Julian Jessop, Economics Fellow at the free market think tank the Institute of Economic Affairs, commented on yesterday’s GDP figures

“The 0.3% growth in the UK economy in November was better than expected, but the monthly GDP data are volatile. The economy still contracted in five of the eight months to November, leaving trend growth barely above zero.

“The bounce in November was helped by a rebound in car production after the Jaguar Land Rover cyber-attack in September. However, there was another large fall in construction activity, adding to evidence that the government’s mission to “build, baby, build” is failing to launch.

“More encouragingly, services output also rose by 0.3%, despite the pre-Budget jitters. Ironically, the largest positive contribution here came from “professional, scientific and technical activities”, which included a 4.6% jump in accounting and tax consultancy. At least the uncertainty was good for somebody.

“Nonetheless, the persistent weakness in consumer and business confidence and in the more timely survey data – notably in the retail and construction sectors – confirms that underlying growth remains weak.

“The government appears to have given up on growth in favour of policies designed to redistribute income and wealth, and to expand the role of the state. This is crushing the “animal spirits” that drive spending, investment, and job creation in the private sector.  Even if the economy avoids a technical recession, growth is likely to remain too weak to escape the “doom loop” of deteriorating public finances and ever higher taxes.”