Beauty, it is said, is in the eye of the beholder. The same principle seems to hold to the interpretation of economic data by politicians – and never more so than in an election year. The UK will hold a general election in May, so the major political parties are scrutinising the latest UK growth data from the Office of National Statistics (ONS) for evidence of beauty or beastliness depending on whether they are hoping to retain power or gain it.
The ONS figures show that the UK economy grew by 2.6% over the course of 2015, but reveal that growth slowed from 0.7% to 0.5% between Q3 and Q4, providing plenty of ammunition for politicians of every shade. Full year growth of 2.6% is the best economic performance that the UK economy has seen since 2007 and, of course, was seen against a background of subdued global demand and weak growth in the Eurozone. On the official side, Joe Grice, the chief economist at ONS, declared that it was premature to say if the slowdown exhibited between Q3 and Q4 would continue: “The dominant services sector remains buoyant while the contraction has taken place in industries like construction, mining and energy supply, which can be erratic.”
The good news in Q4 came from the UK’s dominant service sector which enjoyed growth of 0.8%, but manufacturing grew by just 0.1% a level last seen in Q1 2013 and construction contracted by 1.8% over the previous quarter.
Chancellor George Osborne, keen to keep his job in May, declared the UK economy to be “on track”, but cautioned that the international climate was deteriorating and that therefore the government must continue on its current course. Mr Balls, who would like to have Mr Osborne’s job, come May, had the following take on the same information: "Tory claims that the economy is fixed will ring hollow with working people" whose "wages are down by £1,600 a year since 2010".
There are now under 100 days left before the poll when UK citizens will give their verdict, as far as democracy allows, on the directions being proposed by the politicians.