According to revised figures published by the ONS this morning, the economy was entirely flat in the first quarter of 2012 – which is different to the original estimate of a 0.1% contraction. That means the UK didn’t have the requisite two consecutive quarters of contraction that make up a recession – so there was no double-dip. Forgive MT if it doesn’t crack out the bubbly.
The ONS’ figures weren’t all so positive: GDP in 2008 has now been revised so that it dropped by 7.2% against its peak - almost a whole percentage point down from the 6.3% drop previous estimated.
The new figures also show at the beginning of this year, households suffered their biggest drop in living standards in a generation, with real disposable income falling by 1.7% - the largest quarterly drop since 1987. Not surprisingly, this meant the amount households were saving also dropped, to just over 4%.
Can Danny Alexander’s plans for more than £100bn of capital investment into infrastructure improve conditions? The chief secretary to the Treasury announced details of the government’s spending allocations for major infrastructure projects this morning, including £200m for ‘initial scoping work’ on the second round of Crossrail, and £250m for fast broadband infrastructure (a government favourite).
Other commitments include £10bn to clear the ‘urgent backlog’ of repair in schools, as well as money to create ‘a million’ school places over the next decade (ambitious, much?), as well as £370m for flood defences and cash to upgrade the northern stretch of the A1 and to improve the A14 from Felixstowe to the Midlands, which will start two years early.
Not bad, although as with all these announcements, exactly how many projects come to fruition remains to be seen. Governments’ records on these kinds of things aren’t exactly impressive.