Making a lot of a little

According to the first estimates by the Office for National Statistics, real UK GDP rose by 0.5% in the first quarter of 2011. In the House of Commons, David Cameron claimed that “it’s clearly a success the economy is growing”, while Ed Balls, Shadow Chancellor, countered this by stating that the economy “flat-lined in the last six months with no growth at all”.

So who is right? According to the statistics both are, in the sense that the economy grew by 0.5% in the first quarter of 2011 after shrinking by 0.5% in the fourth quarter of 2010. But what bigger picture do the figures paint? Is the economy now in recovery mode? Or is the fact that growth is so small a sign that the economy is still fragile? Could it easily dip back into recession as the tax increases and government expenditure cuts begin to bite?

And what of the policy implications? Do the latest figures make a rise in Bank Rate more or less likely in the near future? And how will the figures impact on confidence? Are they more or less likely to stimulate investment? Will consumers feel more confident that recovery is under way and their jobs are therefore more secure?

The following articles assess the situation and look ahead at the prospects for the UK economy.

Articles
UK economy ‘on a plateau’ as 0.5pc GDP rise disappoints The Telegraph, Emma Rowley and Philip Aldrick (28/4/11)
GDP figures: Cameron accused of complacency over economy Guardian, Hélène Mulholland (27/4/11)
Low growth figure suggests economy is stagnating – at best Independent, Sean O’Grady (28/4/11)
A matter of interpretation but nobody’s happy at the latest news Scotsman, Terry Murden (28/4/11)
UK economy grows by 0.5% in first quarter of 2011 BBC News (27/4/11)
Britain ‘on the edge of a double dip recession’ The Telegraph, Philip Aldrick (27/4/11)
British GDP grows by 0.5 per cent Channel 4 News, Faisal Islam (27/4/11)
GDP: Slow but not stagnant BBC News blogs: Stephanomics, Stephanie Flanders (27/4/11)
GDP figures: Despite meagre growth, we must hold our nerve The Telegraph (27/4/11)
The economic gamble looks ever more reckless Independent (28/4/11)
If George Osborne thinks this is the road to recovery, he needs a new satnav Guardian, Heather Stewart (27/4/11)
GDP figures: the verdict Guardian, Michael Burke, Eamonn Butler, Frances O’Grady, Ian Brinkley (27/4/11)
UK GDP grows 0.5pc: reaction The Telegraph, various commentators (27/4/11)

Data
GDP growth ONS
GDP preliminary estimates ONS
Forecasts for Output, Prices and Jobs The Economist
Forecasts for the UK economy: a comparison of independent forecasts HM Treasury

Questions