UK economy grows by 0.8%

[El Cid]

What does it mean when it says that the economy has grown?

 

Does inflation grow the economy, does government borrowing and then spending it grow the economy?

Does more immigration grow the economy, so the economy with a population of 52 million will be smaller than one with 62 million. Does it mean we will all be happier?

 

http://www.bbc.co.uk/news/business-27203433

[DeathAxe]

It means they are trying to make it look like positive things are going on to put their ratings up in time for the next election.

[tzijlstra]

It is to do with the amount of spending, but it is a really complex system that can be manipulated rather easily (for example by government spending). However, it is a standard that has been used for a long time and seems to be rather accurate.

[El Cid]

It is to do with the amount of spending, but it is a really complex system that can be manipulated rather easily (for example by government spending). However, it is a standard that has been used for a long time and seems to be rather accurate.

 

They have different measures of inflation, do they have a 'growth' measure without government spending?

[I1L2T3]

Usually measured against changes in GDP.

 

This level of growth is about what we need. Hopefully it can be sustained and become less consumer and debt-driven.

[tzijlstra]

They have different measures of inflation, do they have a 'growth' measure without government spending?

 

At that point you'd have to define government spending Like I said, it is really complex. If I am not mistaken the way they assess it on an annual basis is through the tax-income - by knowing how much tax was paid over a year you know how the GDP is doing. But I am not sure how they do it for the quarterly/monthly statements. Perhaps that is based on the VAT balance in combination with a comparison of previous years?

 

I only have an A-level equivalent in economics though, so I am not sure, it is a long time since I had to read through all this stuff!

[Obelix]

They have different measures of inflation, do they have a 'growth' measure without government spending?

 

You are joking rigth - there's no way that Brown et al would have allowed that as it would have shown some alarming numbers. Similarly there is no way Osborne will allow it until the economy is back to something like normal. It is a good idea though.

[999tigger]

The danger is an economic recovery/boom driven by the housing market, credit and the SE rather than one based on exports and international competitiveness. We want the latter but I think we will get the former.

[Mecky]

Have you noticed when it's not good news it's classed as an economic forecast but if things are looking better it's classed as actual economic growth?

[999tigger]

Have you noticed when it's not good news it's classed as an economic forescast but if things are looking better it's classed as actual economic growth?

 

Nope these are actual figures, which relate to events past that have happened. Forecasts relate to predictions for the future.