The Mask Removed – Why the Recovery is Not Over Yet
For any incumbent party, extolling the virtues of their achievements is an obvious way to keep voters ‘on-side’.
Throughout the election campaign so far, David Cameron has been proclaiming that the recovery is well and truly underway.
The Budget announcement last month likewise saw George Osborne waxing lyrical about the
recovery being ‘truly national’ and placing Great Britain on high when it came to comparing us with the economic growth of our European counterparts.
However, despite the fact that National income increased at an annual rate of 2.4 % in the first three months of this year, only 0.1% slower than what was forecast in the Budget, the quarterly growth does not look so impressive.
The figures show that, in terms of economic growth, the UK economy only grew by 0.3% in the first quarter, compared with 0.6% growth seen in Q4 2014.
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The slowdown in growth has been partly blamed on the failure of the construction industry, which has been experiencing a slump for the last 6 months.
The production industries have also been letting the side down with the oil price crash causing a crisis for North Sea Oil.
After the Budget was announced, Love Energy Savings commented that the positive spin should be approached with caution.
Osborne admitted that falling oil prices have done little to aid a global economic recovery but very little has been said about why the fall in oil prices has not been fully reflected in the domestic energy market.
This suggests to us that the fall in prices is superficial and short-term. It is not a tool that will aid long-term recovery and it may in fact be masking an overall rise in prices.
With growth slowing, this may be a sign that the predictions we made are now becoming a reality.
Cameron is now claiming that the recovery is not over and Osborne has been quoted as saying that we have now reached a ‘critical moment’, commenting that we “can’t take the recovery for granted and the future of our economy will be on the ballot paper”.
Whatever happens on May 7th, the next government will have a real job to ensure recovery continues.
It is now clear that they cannot just rely on low oil prices and a more sustainable long-term plan is required if we are to see continued prosperity.