1. ITV Report

GDP, growth and why it matters to us

We hear the words thrown around all the time: GDP, economic growth - but aren't they all just numbers?

Journalists get excited about GDP because it tells us how the economy is doing. If the economy is one giant supermarket, with everything we produce filling the shelves, GDP is the takings. If they're going up, we're doing well. If they're not it's bad news.

Today the bad news came to an end - takings are up for the first time in a year. That's important because the more things we're selling, the more people we'll need to make them.

Offshore Group Newcastle (OGN) says 400 people will be needed to build the foundations for an oil rig. Credit: ITV

Tyneside saw some benefit today. Offshore Group Newcastle is creating 400 jobs at Wallsend, after winning a contract to build anchors for oil rigs for an energy giant. And Newcastle city centre is bucking the national trend by increasing visitors by two million in two years, thanks to the innovative 'Alive After Five' late opening scheme.

The government claims today's growth figures prove we're on the right track. Labour says the impact of the Olympics has skewed the figures, making it seem like we're doing better than they are. With food and fuel prices rising, and one in ten people out of work, very few of us will be celebrating these figures.

But Prof Robert Hudson, an economist at Newcastle University Business School, thinks we will all start to feel the effects if GDP keeps going up.

"In the very short term this is a statistical number but as time goes by, as the trend continues, people will start to feel the benefit - more money in the pockets, unemployment will go down and so on."

– Prof Robert Hudson, Newcastle University Business School
Today's positive figures could make us more optimistic about the future, persuading us to spend more. Credit: ITV

Business leaders have also welcomed today's news. The North East Chamber of Commerce says it confirms the optimism businesses here have been feeling for a while.

They hope that optimism might spread to more of us - the customers in our big economy supermarket. That might persuade us to spend more, pushing takings up further.

Despite today's good news, GDP is still only as good as it was this time last year. The store managers (Cameron and Osborne) now need to prove they can keep the tills ringing in the months to come.