The UK economy posted its second quarter of positive growth yesterday, and many have heralded the beginning of a long awaited recovery. However, while some growth is better than none, some perspective is needed before one starts popping champagne corks.
Firstly, 0.6% can hardly be describes as robust growth. Indeed, as many have pointed out, the last time the economy grew by 0.6% it was followed by a contraction in the subsequent quarter. It is also worth noting that while GDP is beginning to head in the right direction, the UK economy is still 3.3% below its peak output in 2008. Here in Northern Ireland, the most recent data saw a fall in the Northern Ireland Composite Index of 0.8% for the first quarter of 2013, while NI is still over 10% behind its peak level of output. See here
There are many other economic indicators that should also cause concern, in particular the continuing contraction in real wages since the crisis began. While much is made of the performance of employment levels and the claimant count, the standard UK unemployment rate remains exactly where is was 2 years ago at 7.8%, while long term and youth unemployment rate remain scandalously high.
Growth in GDP is certainly more welcome than contraction, but as far as an economic recovery is concerned the UK has a long way to go.