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It hasn't received a lot of attention but the ONS published a handy little document (PDF) this morning briefly comparing the current economic recovery in the UK  with the last three.  Its conclusion is that  the recovery was pretty much following a similar trajectory to those that followed the recessions of the early 90s, early 80s and mid-1970s: volatile but a gradual recovery over a period of months.  It took around 30 months, for example, for the economy to return to its pre-recession levels of activity in the 1980s. 

It hasn't received a lot of attention but the ONS published a handy little document (PDF) this morning briefly comparing the current economic recovery in the UK  with the last three.  Its conclusion is that  the recovery was pretty much following a similar trajectory to those that followed the recessions of the early 90s, early 80s and mid-1970s: volatile but a gradual recovery over a period of months.  It took around 30 months, for example, for the economy to return to its pre-recession levels of activity in the 1980s. 

However, what the ONS study finds is that over the last six months, the economy has begun to deviate from previous patterns.  The 1980s recovery, which is most comparable to the current situation given the severity of the preceding resession, was starting to power ahead at this time while we have just experienced two effectively static quarters.

Those with political axes to grind will claim this is the result of Osborne's cuts agenda.  The truth is it's impossible to tell at this stage.  These quarters could prove to be a blip - the 1970s recovery was particularly volatile, for example. In addition, the ONS is clear that the big drag on recovery has been weak performance on exports (which may now be picking up) and low consumer spending.  It is, of course, possible that consumer and business activity is being suppressed by the fear created by all the talk of cuts but that is speculative.  By contrast and more tangibly, ONS data shows that government spending is still actually a significant contributor to growth.

I would be far more worried about the very mild efforts the Government is currently making to drive growth given the risk that the two last quarters may be (although we cannot be sure) a sign of something more worrying.  So, for example, we have been given more details  today of how the Green Investment Bank will work.  It's now been confirmed that the Bank will be funded by the Government to the tune of £3 billion over the next four years.  On a very rough estimate that should allow it to raise around £30 billion on the markets to invest in the UK economy over a period of maybe five years.  Sounds a lot but to put that into perspective, if we were to match German levels of business investment over the last three years we would need to have been investing an extra £20 billion each year.

The Green Investment Bank confirms for me that the Government is not really serious about a meaningful growth strategy. It also leaves me wondering whether all the campaigning for a specifically green state bank has actually detracted from a much wider debate we need to have about low levels of business investment in the UK and the huge problems that may cause for recovery and will certainly cause for the creation of sustainable growth over the long term.  In short, given the UK's long historical record of relatively low business investment, we need a debate about whether we need a much bigger state bank committed to both green and more general investment in infrastructure and business innovation.

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