The UK economy continues to show signs of recovery. According to the Office for National Statistics (ONS), the economy expanded by 0.9% between April and June - news that Conservative politicians have been quick to trumpet during the week of their party conference. Yet some industry commentators have pointed out that there's more to the ONS report than GDP, highlighting some worrying signs regarding the nation's economic wellbeing.
Don't forget the deficit
0.9%
The expansion in the UK economy between April and June
£23.1bn
The UK deficit at the end of the last quarter, up from £20.5bn in the first quarter of 2014 - equivalent to 5.2% of GDP
Reuters attributed much of the economy's recent growth to the "strongest expansion in Britain's vast services industry in almost three years".
The news agency warned, however, that there are other factors at play in the recovery - factors that have yet to be addressed. It noted that "exports were weak" in the quarter, contributing to the UK's widening deficit. The deficit currently stands at £23.1bn, up from £20.5bn in the first quarter of 2014 - equivalent to 5.2% of GDP. Economists had expected the gap to narrow significantly to £17bn, reported the agency.
Reuters added that based on the ONS revision of previous statistics, the UK rebounded from its latest recession earlier than previously thought, officially passing its previous 2008 peak in the third quarter of 2013.
Reuters report Illegal impactThe ONS revision also made headlines in
Management Today, which noted that the GDP calculations now include contributions to the economy from prostitution and sales of illegal drugs. In total, the new inclusions contributed £10bn to the UK in 2009 alone.
The publication ran comments from ONS Chief Economist Joe Grice acknowledging that despite the slight improvement in the UK's output, it didn't change the fact that the nation experienced one of its worst-ever recessions.
"Although the downturn was less deep than previously estimated and subsequent growth stronger, it remains the case that the UK experienced the deepest recession since ONS records began in 1948 and the subsequent recovery has been unusually slow," said Grice.
Management Today piece Difficult decisionsAlso reporting on the changes to the ONS data, Bloomberg suggested Chancellor George Osborne will feel vindicated by the GDP revision, with the figure bolstering his argument that further "difficult decisions" will have to be made to cut the deficit - including raising interest rates from a record low of 0.5%.
James Knightley, an economist at ING Bank NV agreed, but argued that "in the absence of inflation and wage pressure and with signs that the housing market is cooling", the Bank of England will probably opt against the move in the short term.
Bloomberg article Shrinking salariesThe economy might be growing, but for most people in the UK, there's little to celebrate, wrote Katie Allen of
The Guardian, who highlighted that wages are falling behind inflation, while salaries are shrinking for many.
Allen quoted TUC General Secretary Frances O'Grady to emphasise the dissonance between reported economic growth and the lack of visible signs for many working families.
O'Grady bemoaned the fact that "while the size of the economy has been revised up, household incomes have been revised down", with disposable income particularly affected.
Citing the cost of falling living standards, O'Grady said: "This is set to be the first Parliament since the Second World War when the Government leaves office with people's pay packets worth less than when they came to power."
The Guardian story
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