Measuring output is the best way we have of taking the temperature of an economy. But the industry standard GDP [gross domestic product] has a host of weaknesses. It is reliant on an arbitrary definition of what is productive, so it includes childcare by nannies but not by house-husbands and wives. It takes no account of who is doing the producing, meaning an economy could have a single worker or full employment. It ignores the underground economy to a large extent, guaranteeing that production always undershoots reality. But more than any of these, GDP is extremely difficult to measure.
The UK economy grew by 0.5% in the fourth quarter of 2015, according to figures released from the ONS [Office for National Statistics].
GDP growth between October and December was up 0.1% from the previous three-month period. It also meant the economy was 1.9% larger than during the same quarter of 2014. But annual growth for 2015 was at 2.2%, down on 2.9% for the previous year. This pace of annual growth is the slowest for three years.
The ONS attributed the quarterly rise in GDP to a 0.7% increase in services, while agriculture also grew by 0.6% during the period. There were falls in construction output and production, which fell by 0.1% and 0.2% respectively. The figures released today are preliminary and are often adjusted up or down once more data become available to the ONS.
George Osborne said: “These figures show Britain continues to grow steadily. Despite turbulence in the global economy, Britain is pushing ahead. "With the risks we see elsewhere in the world, there may be bumpy times ahead – so here in the UK we must stick to the plan that's cutting the deficit, attracting business investment and creating jobs."
The ONS’ chief economist Joe Grice said: “Growth continues to be driven by the UK's dominant services sector, while the production and construction sectors shrank slightly in the fourth quarter.”
China’s growth is over 6% and we are still talking of 0.1% changes being good, we have such a long way to go to be able to say we are paying our way. How can we pay off the deficit support huge infrastructure projects shore up the NHS which is creaking like never before and still supply the public services the public expect?