GDP Press Release: 0.8 is Nothing to Hate

Commenting on the latest GDP figures released this morning, The Adam Smith Institute's Head of Policy, Ben Southwood, said: 

"Lets not mince words. These figures are rather good: growth at 0.8% quarter-on-quarter, or 3.2% in the annualised terms they use in the USA, and 3.1% compared to the same quarter last year.

"The unemployment rate at a five-year low, total employment at an all-time high, inflation at 1.6%, below target again after years above—but not for dangerous deflationary reasons.

"It would be easy for Osborne to conclude that his plan has worked and everything is fine in the UK economy—and to a first approximation he's basically right, things are OK and outside of foreign problems the economy will probably trundle along.

"But the recovery has been painfully slow and long and really we should be seeing a much swifter return to pre-recession living standards.

"Now that the demand side of the economy seems fixed in the short-term, Osborne needs to reform monetary policy so this sort of crisis can't happen again—CPI targeting failed completely, and targeting total spending would have worked much better.

"Perhaps even more pressing and important is planning. UK planning is a mess. Firms cannot build the houses people want in the places they want them and all the government can offer is tiny garden cities.

"Writing in City AM last year economics Professor Nick Crafts said liberalising planning could add full percentage points—tens of billions of pounds—to GDP growth in the short term. LSE experts have calculated that moving the green belt out one mile would instantly make space for a million houses."

For further comments, contact Ben Southwood at ben@adamsmith.org. To arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778 207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates liberal public policies to create a richer, freer world.