Will the government stick or twist in response to the GDP data snafu?
With better-than-expected GDP growth in September but a weaker-than-expected Q3 figure, the government may be torn between acting or not acting.
Things can change quickly in politics, but they can also change quickly in economics.
Last month, Chancellor Rishi Sunak boasted that the UK would have the fastest-growing economy in the G7 this year and next, but new growth data may have thrown a spanner in the works.
While the September GDP figure of 0.6 percent was better than expected, the quarterly figure of 1.3 percent was below expectations.
This was due to revised July data showing a 0.2 percent contraction versus a previously estimated 0.1 percent drop, and August’s 0.4 percent growth was revised down to 0.2 percent.
The quarterly figure is down from 5.5 percent in Q2, but an easing of coronavirus restrictions in the three months leading up to June allowed for pent-up demand to be met.
So, what can the government do to prevent the economy from stalling?
Securing more impressive trade agreements could help.
According to a report by the Independent, the post-Brexit trade deals secured by Boris Johnson’s government will only provide a 0.01-0.02 percent boost to the country’s economy over the next 15 years, compared to an estimated 4% hit from leaving the EU over the same timeframe.
The benefits of any new trade agreement may be hampered temporarily by issues at the world’s ports, which are exacerbated by HGV driver shortages, particularly in the United Kingdom, but they would help move the dial in the coming years.
“High trade barriers,” according to David Henig, co-founder of the UK Trade Forum, are to blame, and he “suspects we’re going to have plenty more disappointing GDP figures to come.”
More money for the DVLA to help it deal with the backlog of HGV driver applications could be taken as a more immediate measure.
Many drivers are being held back in their training because of agency delays.
There could be if this stumbling block is removed.
UK news summary from Infosurhoy.
Will the government stick or twist over the GDP data snafu?
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Will the GDP data conundrum see the Government stick or twist?