GDP figures today show the economy grew by a pitiful 0.2% in Q2 of 2011, throwing the OBR's growth estimate way off course - meaning Osborne must now focus on growth (but more likely will announce more cuts to deal with an expanding deficit).

In advance of the formal announcement, commentators had been expecting GDP growth to be within -0.5% to 0.5%. This in itself tells a story. Low expectations reflect the failure of George Osborne's economic strategy - his cuts have suppressed growth, as well as causing the inevitable misery: pain without the gain.

All of this has been entirely foreseeable and predicted. Those on the left have rightly argued that unemployment is the main issue Osborne should be addressing, rather than his deficit obsession. Like my Nan used to tell me 'take care of the pennies and the pounds will look after themselves', a new maxim should be 'take care of unemployment and the deficit will take care of itself'.

Osborne's failure to create jobs and growth domestically is being compounded by the failures elsewhere in the world. The eurozone (always unviable IMO) is floundering as the reality of one monetary policy for such clearly different and divergent economies is made clear. Nevertheless there are some common truths for those countries most in crisis: the first being routine and endemic tax evasion and avoidance; the second being the deregulation of the finance sector; and the third, and least commented on, being an absence of manufacturing base in the economy.

This latter point is now being exacerbated by the growth of the BRIC countries (Brazil, Russia, India and China) particularly the latter. The effect on Europe and North America to the new reality of China as a major manufacturing economy (and the other three also catching up) is huge - and has the effect has been exacerbated in the US due to NAFTA, which had already decimated US manufacturing industry. In the UK, manufacturing has dropped by 9% since 2008 Q1.

With none of the three issues: tax justice, financial regulation and manufacturing policy at the heart of any western government's programme, the future economic prospects look bleak however today's GDP figures are spun.


Download the full ONS data and analysis

By Andrew Fisher, Left Economics Advisory Panel

Privatisation

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BOOK: COST OF LIVING CRISIS

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By MIchael Calderbank

Foreword by Mark Serwotka, PCS General Secretary

 

Buy now from www.radicalread.co.uk

Based on research commissioned by the TUCG, the book examines why costs have risen for all items of expenditure, ranging from housing and child care to food and transport. He makes practical proposals on how these costs can be reduced. He also delivers an uncompromising message to the leaders of all mainstream Westminster Parties: it is time to end the politics of austerity, an ideological project to cut the size of the state permanently.

FAMILY JUSTICE

New pamphlet on the effect of legal aid cuts on Family Justice.  Double click the picture below to dowload.

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THE GREAT PAY ROBBERY

 

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The impact of falling real wages, benefit cuts and soaring housing costs - with a foreword by Mark Serwotka (General Secretary, PCS).  Click image to download.

COST OF LIVING CRISIS

Cost of Living

 

 Click the image to download the new pamphlet from TUCG, looking at how the cost of living is impacting on working families, and what kind of measures are needed to really make a difference (with a foreword by Mick Cash, RMT General Secretary).

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