GDP gloom

Just when a combination of the Queen's Jubilee, the Wiggins win in the Tour de France, and the Opening of the London Olympics, seemed likely to lift British spirits someone has to choose this week to publish the last quarter's GDP data for which “catastrophic” seems the kindest word. In fact, this is what the BBC's Economics Editor, Stephanie Flanders, had to say yesterday: “If correct, these figures would show by some measure the worst four-year period for the UK in at least 100 years -- worse than what happened in the 1920s and 30s, worse than what happened in the 1970s and 80s.” The figures may be adjusted slightly in due course but the shocking 0.7% contraction in the second quarter of this year when 0.2% was the worst that was expected showed that Britain's double-dip recession is continuing and perhaps getting worse. The best excuses that can be found for the second quarter performance are of the extra day at Jubilee Bank Holiday and the rain. Whether these factors can really account for contraction in all three key areas, of construction, manufacturing and services, must be doubted. Once again, and with greater force than before, George Osborne's competence and concentration at the Treasury must be open to question. His response yesterday, that “the government must have a relentless focus on the economy” is hardly enough.