GDP Q1 data: “It still feels like the script of the UK economy has been penned by Dante”

By Marcus Bullus, trading director at MB Capital

 

In looking at today’s 1Q GDP data for the UK, it is true that we have avoided a profound psychological blow for the UK’s consumers and businesses. But just because we’ve dodged the triple dip does not mean we’re back in business.  Despite this rare piece of positive news, it still feels like the script of the UK economy has been penned by Dante.
There are countless reasons why the UK economy could stay stuck in first gear, from credit-starved SMEs to stubbornly high inflation and low consumer confidence. Looking further afield, the US is unable to get into gear, while the worst is almost certainly to come for the Eurozone. In a global marketplace, the UK economy is still very much on shaky ground.
George Osborne will have breathed a major sigh of relief but the continued weakness of the economy means he will almost certainly come under more pressure to focus on growth rather than austerity. But whatever the IMF, the credit agencies and opposition say, hell will freeze over before the Chancellor switches to Plan B.
The fact we’re celebrating 0.3% growth says it all. We’re clutching at straws.