The economy is turning a corner - but very slowly

The latest figures showing the economy not growing at all in April will not have been welcome news to political parties, ITV News Economics Editor Joel Hills reports.

Economic growth stalled in the rain in April.

The headline is terrible news for Rishi Sunak in the middle of an election campaign, but then the headline doesn’t tell the whole story.

Growth in the three months between February and April was up 0.7% on the previous three months and there is plenty of evidence to support Sunak’s claim that a corner has been turned.

Inflation has receded. Pay has been rising faster than prices for eleven months and interest rates are forecast to start edging down in the months ahead.

There’s every reason to be hopeful that the worst is now behind us.

The UK has been hit by a series of economic shocks in recent years, but our economic problems pre-date the pandemic, the invasion of Ukraine, and Brexit.

The truth is the UK has been stuck in a low growth rut since 2008 and, as a result, wages have barely grown.

Between 1992 and 2007 - under John Major and Tony Blair - Gross Domestic Product (GDP) per person in the UK economy increased by 45.9%.

In the last 15 years since - Gordon Brown, David Cameron, Theresa May, Boris Johnson, Liz Truss and Rishi Sunak - it has grown by just 4.3%.

Credit: Resolution Foundation

Had the economy continued on its pre-2008 trend, the Resolution Foundation calculates that the average worker would be £14,000 a year better off.

Slow growth is a serious problem. The UK is not the only wealthy country to experience “stagnation” but our strain looks particularly virulent.

All of the parties in this election are promising to grow the economy. All of them promise better jobs, better pay and higher living standards.

These are highly desirable aims, but the question we should be asking is which party has a convincing plan to deliver them?

Which party has the policies that are likely to increase business investment (which has been lethargic since Brexit), public investment, productivity and economic growth?

There is more to life to GDP but goodness it helps - not least if you want the tax revenues to improve funding for public services.

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