The UK economy grew by as much as 1.4% in 2013, and most forecasters expect this to improve over the next two years. While the government points to this as a success of their economic policy, the opposition insists the recovery is failing to benefit ordinary people – the much talked about ‘cost of living crisis’.
That the economy is on the up is in no doubt. But are Labour right to assert that the link between GDP growth and living standards has been severed?
Green shoots
It’s not just GDP showing signs of recovery. The kind of modest growth we have experienced so far could easily be attributable to the finances sector, which recovered early from the crash.
The construction industry has posted eight months of consecutive growth. UK manufacturing is projected to grow 2.7% in 2014 – stronger than any other European country. Car sales are at their highest in five years. The engines of economy are revving up.
With cheap credit hard to come by, how is demand increasing? Simple: unemployment is falling, and at a higher rate than initially predicted by Bank of England chief Mark Carney. This is probably the most significant sign of recovery – the more people in work, the more money they have to spend, and the better for everyone. Continue reading
