0.1% GDP growth is nothing to celebrate

0.1% GDP growth is nothing to celebrate, even in isolation. However the wider context makes it much worse.

The latest economic figures from the Office for National Statistics reveal that the UK economy grew by an anaemic 0.1% in the final quarter of 2024, continuing the economic stagnation that’s been going on since before Labour came to power.

No matter how hard the Labour government and liberal-capitalist hacks try to dress this 0.1% growth rate up as some kind of economic success story, it’s absolutely not.

We’re all aware of how Keir Starmer and Rachel Reeves killed confidence and optimism stone dead when they came to power with a new round of economy-strangling austerity cutbacks and a load of doom-mongering rhetoric about how things are going to get worse under their watch.

Is it any wonder that people aren’t spending, and businesses aren’t investing, when a new Labour government is sticking to the same myopic austerity book-balancing exercises as their predecessors? Especially when they’ve got a huge parliamentary majority with which they could invest in British people and the British economy if they actually wanted to.

Starmer’s inner circle and their cheerleaders in the liberal-capitalist media are doing their best to present this minor uptick as evidence that things are going well, but it’s desperately misleading for several reasons.

Economic malaise

Britain’s quarterly growth figures make utterly dismal reading, not just since Labour came to power, but long before that too.

The economy hasn’t registered quarterly growth figures above 1% since the 2021 bounce back from the extraordinary 20.3% Covid-related drop in Q2 2020.

The UK is stuck in a stagnant economic malaise, and it doesn’t matter how hard Rachel Reeves tries to replicate the Tory agenda of austerity cutbacks and believing in the growth fairy, nothing is likely to change for the better without a fundamental fiscal policy reset.

It’s deeply disappointing that Labour didn’t use their election win to deliver this kind of economic reset, and it beggars belief that they’re trying to hype up such meagre gains as proof that they’re heading in the right direction, rather than continuing the stagnation.

Margin of error

A 0.1% increase on the previous year rather than the projected 0.1% fall is proper margin of error stuff.

If you had £100 worth of assets and they increase in value to £100.10, rather than falling to £99.90, would you even really notice? Would you go off and brag to your mates about it?

Such minimal differences are important to the political narrative though because politicians can talk up even the most anaemic growth rate as something positive like "signs of recovery" or "a step in the right direction".

A financial quarter of almost imperceptible growth also helps the political narrative because the official definition of "recession" is two consecutive quarters of negative GDP growth.

If the economy flatlines at 0% growth or registers the smallest possible growth rate of 0.1%, that means people can’t describe the woefully stagnant economic conditions as a "recession" for at least another half a year.

GDP per capita

The most misleading thing about headlining crude GDP figures is that it takes no account of population change.

If the economy grows by 0.1%, but the population increases by more than 0.1%, then the economy is actually shrinking in real terms, which is what’s actually happening.

By the end of the Tories’ 14 years in power, net migration was running at over 700,000 people per year, which is astonishing given repeated Tory promises that they would reduce immigration to below 100,000, and their false narrative that Brexit would bring down immigration.

The only reason the UK economy is growing at all is that there are more people.

Of course Britain is sitting on a demographic sink hole with a rapidly ageing population and ever declining birth rates (exacerbated by cruel economic sanctions against families with more than two kids), so some immigration is actually needed in order to bolster the workforce.

However it’s extremely convenient for a failing government to be able to point to the immigration-bolstered 0.1% GDP growth rate and pretend that the country is getting richer, when it’s actually getting poorer if we compare the size of the economy with the size of the actual population.

Redistribution

Crude GDP figures are also misleading as a measure of national wealth if nothing is done to prevent the wealth hoarding of the already extremely wealthy.

GDP growth is absolutely meaningless to ordinary people if all of those gains and more end up in the bank accounts of millionaires and billionaires, while the majority see their wealth further eroded away by extortionate rent/mortgage costs, wages settlements that don’t match inflation, rip-off privatised utility bills, and capitalist price gouging.

Even if 0.1% were something to brag about, it’s still worthless to most people if nothing is being done to ensure that gains are distributed across all strata of society, not just to the wealthiest.

Conclusion

Even without context 0.1% GDP growth is rubbish margin of error stuff, but it’s even worse if we take population change and rising inequality into account.

The lesson the Labour government should be taking from this is that continuing Tory policies like austerity, social security cutbacks, and under-investment are just going to prolong the economic stagnation, when what’s needed is re-investment in our country, improved public services, and measures to lift people out of poverty so that they have money to spend.

What Starmer and Reeves are likely to take from this feeble growth rate is that they’re off the hook because nobody is allowed to claim that the economy is in recession until at least the back end of 2025.