Why does the Telegraph think pitiful growth means ‘Good News Britain’?

2:23 pm - November 2nd 2012

by Duncan Weldon    

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“Good News Britain: CBI lifts UK growth forecasts”, said yesterday morning’s Telegraph as the CBI nudged up their growth forecasts for 2012 and 2013 and made their first estimate at 2014 growth.

So how much ‘good news’ do the new forecasts actually contain?

Not a huge amount that I can see.

On growth, the CBI now expect 0.0% in 2012, 1.4% in 2013 and 2.0% in 2014. That compares to the June 2010 OBR forecasts (on which Government policy were based) of 2.8%, 2.9% and 2.7%. Growth that weak would mean it would be late 2014 before we regained early 2008 levels of GDP. The Telegraph today says to the new CBI numbers imply Britain will not face a ‘lost decade’, whihc may be true but i’m not sure a lost 6 years is cause for celebration.

As the CBI’s John Cridland commented, “While we expect underlying momentum to pick up modestly next year and to be slightly stronger in 2014, the pace will remain relatively lacklustre”.

On living standards, the news is bleaker. The CBI’s new forecasts for inflation and earniongs growth implies more painful falls in real wages lie ahead.

Whilst the OBR currently expect real wage growth to turn positive in mid 2013, the CBI numbers imply real wages will continue falling until mid 2014 – another year of squeezed living standards.

On the deficit, the CBI expect government borrowing in 2014/15 to be £102.2bn. That is around one thrid higher than the OBR’s current estimate of £75bn for 2014/15.

To summarise – weak growth, a bigger squeeze on living standards and higher borrowing. Welcome to ‘good news Britain’.

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About the author
Duncan is a regular contributor. He has worked as an economist at the Bank of England, in fund management and at the Labour Party. He is a Senior Policy Officer at the TUC’s Economic and Social Affairs Department.
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Reader comments

When capitalism was young each backward step presaged a major leap forward. Now that it is old, monopolised, sclerotic and bankrupt each tiny blip of `recovery’ is but a forewarning of a major new contraction or violent crisis. The film of globalisation is being wound off backwards.

Everything gets to a point where further development or progress becomes impossible or extremely difficult. youthful capitalism starting from a very low jumping off point grow like crazy to begin with but like the world record in the 100 meters has more or less arrived at its limit. Whilst it might be disappointing that the 100m record is unlikely to improve much it is hardly an important matter but for capitalism reaching the limit of its growth, the end of its life span, spells death for what is at base a political economy. At zero growth the class and exploitative nature of the system becomes not only obvious to all but brings the forces together that can and want to overthrow it. No more `social mobility’ or American Dreams to isolate the victims and keep the rest cowed.

The thirty year credit bubble turned Ponzi Scheme not only did not save an already sclerotic, monopolised system but has put a sclerotic, monopolised and utterly bankrupt one in its place.

Blah Blah Blah – usual canned responce.

So what next then, now the one thing that has given us most has stopped growing and is about to fall dead?

Ant that’s why anyone with half a brain doesn’t read the Telegraph.

Why is it good news for the Torygraph demographic?

I think the clue’s in then title of this beeb article:

“Top executives’ earnings up 27%”


Never mind Britain’s sluggish economy – or the fiscal cliff in the American economy.

Cameron: I’ll work with Obama to ensure Syria is top priority

An item in today’s news:

“The secretive financiers have bet millions of pounds that companies including WH Smith, Home Retail Group [Argos, Home Base], Ocado, Sainsbury, Tesco and Dixons will fall in value, according to a list published under new rules by the Financial Services Authority (FSA).

“Lansdowne Partners, one of London’s best known hedge funds, has short sold 0.63pc of the value of Tesco – a £163m bet that the supermarket’s shares will fall. The Mayfair-based group has a 2.51pc short position in WM Morrisons, worth £159.8m. ” [Telegraph website]

Why are so many hedge funds shorting the stocks of leading retail store chains? Could it be that the funds are expecting profits of the stores to fall because of falling retail sales?

Other items in the news:

“Economy has slowed sharply, NIESR says – Unexpectedly weak performance of industry makes a ‘triple-dip’ recession look increasingly likely, analysts say” [Guardian website]

“Retail sales stall raises fears of triple-dip recession – BRC reports weakest sales growth in 11 months as shoppers shy away from spending on big-ticket and luxury items” [Guardian website]

Looks like we’ll be needing another Royal wedding or something similar to divert attention.

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  1. Jason Brickley

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  2. leftlinks

    Liberal Conspiracy – Why does the Telegraph think pitiful growth means ‘Good News Britain’? http://t.co/uDAYDQ7W

  3. BevR

    Why does the Telegraph think pitiful growth means ‘Good News Britain’? | Liberal Conspiracy http://t.co/iPffe0E7 via @libcon

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