Top economist delivers harsh verdict on GDP figures

London's financial district. Photo: Reuters

One of the City's most influential economists, Jim O'Neill, of Goldman Sachs has just given us his take on why the GDP number is so disappointing.

Along with the usual caveats about the difficulty in trusting the statistics completely, his verdict will be pretty harsh for the government to hear.

He told me, it is not easy to work out what is happening in the economy:

Other than a very bleak conclusion that policy has been on the wrong path, fiscal policy being tightened too much, financial sector forced to deliver too much still and our productivity rate has just weakened so much.

O'Neill warned the government to stop worrying so much about the triple A credit rating that has been so prized, saying:

Government has to think carefully about whether it really values the credit rating that it has been so proud to have retained. Other countries haven't been so bothered, if you look at the US clearly they don't seem to be so bothered and the US economy is recovering better than ours...what value is a credit rating when you can't generate jobs, wealth and activity for all the people that live in the country.

He even suggested that if the Coalition does not change its course, they can forget the next election saying:

You've gotta think the government is going to rethink itself, it's halfway through its mandated term, there's international organisations like IMF saying you've got to have a rethink so if they want to get back in power you would think they would have a rethink.

But he did note that the jobs market has continued to be surprisingly strong.