Next Tuesday, the ONS will release initial estimates of second quarter UK GDP growth. It may be a slight exaggeration to call it a ‘make or break’ moment for the Chancellor but ‘make or brake’ might not be a bad description. After six months of no growth, another three months of flat GDP would strengthen calls to slow his current strategy.
Plenty of forecasters are predicting gloom. The graph below, which readers may have seen in some form before, compares this recession with its predecessors. This was the sharpest, deepest downturn in living memory; a similarly strong recovery is needed.
So, what will the chancellor hope to see next Tuesday? Exports and investments will be important, but improving household consumption should be at the top his list. The graph below compares what has happened to household consumption over this recession with previous ones (it displays the double-dip recessions of 1973 and 1975 with a single line.)
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