The ONS first estimate for GDP in the 1st Quarter of 2014 is an increase of 0.8% over Q4 of 2013. That seems on the surface a reasonable rate of progression, though on a closer look it remains rather unbalanced.
But even leaving aside questions of whether some (the richer) are doing better than others in this recovery, there is another question. If we take our quite fast-growing population into account, how much real progress have we made? One good way of looking at this is to take GDP per head of population, and see how it develops over time. ONS provide a dataset on this which currently goes up to Q4 of 2013. We have then estimated that there is ave of 0.6% for Q1 of 2014, once population growth is factored in. UK population generally is rising by around 0.8% per year.
So here is our chart for the last 10 years, taken from the ONS dataset plus our Q1 estimate. The vertical column, we should have said, is in £ per quarter.
UK real GDP per head 2004-14
You will see that over the last year, it is moving back upwards, having fallen for some time below the level the government inherited in 2010 – the product of austerity. We calculate that GDP per head is now about 1.4% higher than in Q2 2010 when the Coalition government took office. That is an average of just 0.35% per year so far. Which is, to be frank, almost invisible. And we still remain far below peak GDP per head in 2007, as the chart shows.
In fact, we’ve just clawed our way back to 2005!
One Response
Jeremy, a telling chart indeed. A suggestion. Over at FlipChart there is a graph of GDP against time with a long term trend line and OBR forecast in it. http://flipchartfairytales.files.wordpress.com/2014/04/screen-shot-2014-04-07-at-10-32-57.png .
Mainly Macro has a similar with a log y axis scale at http://mainlymacro.blogspot.co.uk/search?updated-max=2014-04-19T16:36:00-07:00&max-results=7 .
The area between actual and the trend line is “lost output”. You can see the results of Thatcher and Major assaults on fiscal spending, Mr Osborne is in a class of his own, even when you balance out the great recession affects before the Q2 2010 election. (Whence the country went from the frying pan into the fire.)
Keep it simple for Joe Public (no x^n scales). We should not loose sight of what the 99% have lost in the name of an out of date neo-liberal economic ideology.