Britain is bottom of the G7's growth league table. Excluding earthquake-hit Japan, Britain is growing more slowly than every other major developed economy.
Figures in today’s Independent suggest that Britain is bottom of the G7’s growth league table. Excluding Japan because of the “special factors” caused by the Tohoku earthquake, Britain is growing more slowly than every other major developed economy.
The graphic – reproduced below – accompanies an interview with Robert Chote, head of the independent Office for Budget Responsibility. Mr Chote warned that Britain was facing “relatively weak” growth over the next few months and was unlikely to hit the OBR’s own growth forecast. Britain grew by just 0.2 per cent in the second quarter. By comparison, the Independent’s figures suggest that Canada grew by 0.9 per cent, France by 0.7 per cent and even Italy and the US by 0.33 per cent.
In the interview, Mr Chote said:
“Back in March our central forecast was for 1.7 per cent growth this year, which at the time was fractionally more pessimistic than the average of the outside forecasters.
“Since then obviously we’ve had weaker out-turns in the first and second quarters than most people, including us, anticipated. For the second quarter the ONS [Office for National Statistics] explained a variety of one-off factors that contributed to that.
“As a simple matter of arithmetic, in order to get to 1.7 per cent now you’d be looking for quarter-on-quarter growth rates of 1 per cent in the second and third quarters of 2011, and there aren’t many people out there expecting that.”
Earlier this week, the National Institute of Economic and Social Research predicted that “domestic demand will hinder any meaningful recovery this year” with growth hitting just 1.3 per cent. They suggested that:
“short term fiscal policy is too tight, and a modest loosening would improve prospects for output and employment with little or no negative effect on fiscal credibility.”
If the OBR were forced to downgrade their growth estimates in the autumn, it would be the fourth time that they had done so since Alistair Darling left No 11 Downing Street.
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