ONS admits UK economic recovery is stronger than it thought

The ONS has today revised upwards its growth for most of 2013, to show a recovery far stronger than it admitted at the time. This fits a trend: in economics, good luck tends to come in waves. And the tools economists have to work out what’s happening are so crude (and often useless) that it takes years to work out what really happened. Only in 2011, for example, was it clear that Gordon Brown had incubated the worst economic overheating since the war – hence the crash. But by the time this was clear, everyone blamed bankers for the crash – when, in fact, it was just reckless economic management. Which all the economists, with their ‘output gap’ spreadsheets, missed.

Remember the triple dip? The above graph, from Citi (pdf), shows what nonsense that turned out to be. And how much better things look now (in black).

This has implications for George Osborne in 2014.