‘Boom Britain’ – are we really there yet?
Recent economic data have pointed to growth and a strengthening economy. But does this mean we’re in recovery? Bronagh McCloskey examines what the papers are saying and whether the growth narrative should be taken as read.
Newspapers and blogs don’t tend to focus on the shades of grey in stories. Journalists, just like their readers, prefer bold, decisive stories which aim to grab the headlines and dominate the news agenda. So, just as wash-out summers turn into the hottest on record and sport stars fall from grace within a matter of weeks, so too the news story moves from ‘recession’ to ‘recovery’. The past few weeks has seen a switch in the narrative: some encouraging economic results have led to talk of a recovery, with the ‘return to growth’ slipping into the narrative as a seemingly accepted fact. Economic growth is to be welcomed, but what is this ‘boom’ talk actually based on?
In the past few weeks several positive economic indicators have been published. Most importantly, at the end of July statistics published by the ONS showed that the UK economy grew 0.6 per cent from April to June. This news was followed by encouraging statistics on manufacturing output, which increased by 1.9 per cent in June, and last month’s retail figures showed the High Street enjoyed its best July since 2006. Combine these encouraging trends with a summer heat wave, a royal baby and Andy Murray’s win at Wimbledon and the narrative for ‘boom time Britain’ is all there.
Some, however, have questioned the strength of the recovery. The New Statesman attacked the new narrative, pointing to five persistent weaknesses in the economy. Ed Balls seized on Mark Carney’s words of warning about the shaky base of the economic growth.
Economics aside, the new narrative has turned the tables for both Labour and the Conservatives. The Tories, unsurprisingly, have seized on these figures as signs that the economy is on the mend or – in Osborne’s phrasing of choice – it has moved ‘from rescue to recovery’. Labour has found itself on the backfoot somewhat, without a strong narrative about an alternative economic strategy. A poll by YouGov earlier in the week showed voters equally split on support for spending cuts – the first time support has equalled opposition with commentators holding it up as evidence of a sea-change.
Labour has responded with its cost of living campaign with the argument that while there may be growth in some sectors, it is not felt by voters across the country. The party has focused on inflation, underemployment and low wages as key economic problems and revealed its soundbite figure that people will on average by 2015 have lost a total of £6,600 in real terms during David Cameron’s premiership, but for the Economist the campaign was ‘long on point-scoring and short on detailed solutions’ and Patrick Wintour points to an uneasy silence as ‘Labour election war book remains without a message or an author’.
It is true that the Tories must walk a fine line – previous upswings have been fragile and led to complaints of complacency. But the new wave of Tory confidence cannot be denied and the party is in a buoyant mood – although how robust either recovery is remains to be seen.