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Osborne Set To Be Handed Boost With Improved Growth Figures

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http://www.independent.co.uk/news/business/news/osborne-set-to-be-handed-boost-with-improved-growth-figures-1981269.html

George Osborne, the Chancellor, is set to receive a pre-Budget gift tomorrow in the form of new data revealing that tghe economy has been performing better than previously thought.

The Office for National Statistics is to publish its second estimate of GDP growth for the first quarter of the year, and is widely expected to raise its initial assessment.

Last month, the ONS disappointed economists and dealt a blow to the election campaign of Gordon Brown, who was fighting on a platform of securing recovery, by reporting that the British economy grew by only 0.2 per cent over the three months to the end of March. Since then, however, economic indicators have suggested that the ONS's first estimate, which is made on the basis of comparatively scant data, may have underplayed the extent to which the economy has been bouncing back from recession.

For example, while the ONS had originally thought that the manufacturing sector grew by 0.7 per cent during the first quarter, subsequent data has suggested that the figure may have been closer to 1.3 per cent.

Improving business investment figures, reported last week, plus further boosts from government spending, are also likely to have helped. While consumer spending has been slower – thanks to a combination of higher VAT and the poor weather seen earlier in the year – the effect may have been overplayed.

The National Institute of Economic and Social Research, the independent think tank, has already indicated that it believes the correct figure for growth in the first quarter could be as high as 0.4 per cent.

Such a revision would be a major boost to Mr Osborne as he continues to frame the emergency Budget he is due to deliver in a month's time. The Chancellor was told last week that government borrowing last year was £7bn lower than had previously been thought – giving him slightly more room for manoeuvre on spending and taxation. Better economic growth would augment that helpfully.

Nevertheless, Mr Osborne will be acutely aware that the existing Treasury forecasts for borrowing are based on optimistic forecasts for economic growth, particularly in 2011. The Office of Budget Responsibility, which the Chancellor has asked former Treasury economist Sir Alan Budd to run, is widely expected to trim these forecasts prior to the Budget.

Howard Archer, chief economist at IHS Global Insight, expects the UK's second-quarter GDP growth to pick up to between 0.5 and 0.6 per cent, quarter-on-quarter, as some of the weather-related loss in activity in the first quarter is clawed back. But he warned that the economy is likely to take a short-term hit from the effects of the Icelandic volcanic ash cloud, and also faces major medium-term challenges.

Wow if it's 0.4% then that's £155bn and £200bn+ of funny money well spent and Gordon's reward for this economic genius was the sack.

With the saviour of the known universe out of his job what now for the economic recovery?

I do hope nothing unexpected happens with these figures....

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Wow if it's 0.4% then that's £155bn and £200bn+ of funny money well spent and Gordon's reward for this economic genius was the sack.

With the saviour of the known universe out of his job what now for the economic recovery?

I do hope nothing unexpected happens with these figures....

thats 7 times the normal deficit for 0.4%

aa3 may have a point....spend 70 times the normal deficit to acheive the magic 4%.

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http://www.independent.co.uk/news/business/news/osborne-set-to-be-handed-boost-with-improved-growth-figures-1981269.html

Wow if it's 0.4% then that's £155bn and £200bn+ of funny money well spent and Gordon's reward for this economic genius was the sack.

With the saviour of the known universe out of his job what now for the economic recovery?

I do hope nothing unexpected happens with these figures....

While weight of positive or negative data can eventually become a little self-fulfilling we are currently in the very early days of a recovery and the jury is still out on wether this is actually just a lull before the greater storm.... I for one however would welcome something other than a negative outlook going forwards... the social problems which will be a result of the actions necessary to solve the financial mess labour left us with will be enough to scar a whole generation as it is ... if we have a further recession it'll be even worse. If in ten to fifteen years time we have managed to repair a great deal of the damage done by labour and have a less powerful state with a far larger segment of the population being self-sufficient rather than reliant on the state for the bulk of their cahs through income or benefits then I'll be happy man..... for the ideal way through this is to somehow maintain a low growth rate ( as oposed to none, strong growth is not even an option), lowish inflation, lowish interest rates, and as this board is what it is a gradual real term shrinkage in house prices..... that for me is the best case from here.... clearly the worst case at the opposite end is viable and would result in a huge amount of pain for most families.

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While weight of positive or negative data can eventually become a little self-fulfilling we are currently in the very early days of a recovery and the jury is still out on wether this is actually just a lull before the greater storm.... I for one however would welcome something other than a negative outlook going forwards... the social problems which will be a result of the actions necessary to solve the financial mess labour left us with will be enough to scar a whole generation as it is ... if we have a further recession it'll be even worse. If in ten to fifteen years time we have managed to repair a great deal of the damage done by labour and have a less powerful state with a far larger segment of the population being self-sufficient rather than reliant on the state for the bulk of their cahs through income or benefits then I'll be happy man..... for the ideal way through this is to somehow maintain a low growth rate ( as oposed to none, strong growth is not even an option), lowish inflation, lowish interest rates, and as this board is what it is a gradual real term shrinkage in house prices..... that for me is the best case from here.... clearly the worst case at the opposite end is viable and would result in a huge amount of pain for most families.

it might be a recovery of GDP figures, but figures do not a recovery make.

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  • 260 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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