There is an excellent analysis from Paul Mason on his Twitter:
1) Low but services are bouncing back; still leaves UK lowest growing of Western big econs
2) this is essentially product of falling real wages: not just inflation vs wage rises, but loads of downgrading in NHS, (BBC!)…combined with massive paying down of debt by consumers fearing moment mortgage payments rise and/or lose their jobs
3) Therefore the main impact of public sector self-inflicted recession yet to be felt. Nightmare for Coalition is what happens when it is…
4) However, for now the Coalition’s rebalancing story is there in embryo: no consumer led recovery; forces switch to investment – BUT….it may need an extra bump from corporate tax cuts. And/or QEIII as per Vince on Sunday
5) UK looks like it will gradually claw its way out of near double-dip only to be flattened again in 2012, 13, etc by fiscal tightening.
6) The politics of #ukgdp – there is no economic feelgood factor and will not be for some time (years?); yet…
7) Argument within coalition is Vince vs George: but over timing of further monetary and fiscal (tax cuts) stimulus.
8) Labour strategists know their chance lies not in clever fiscal ideas (alt budgets etc) but in riding the wave of pain
9) However… still only embryo of rebalancing: absent an industrial policy, in world of industrial policy mortal kombat = no trousers
10) OBR predictions? Mmm… (cough) … ahem. Er. Danger of becoming a bit unanchored to reality. But were are BoE’s …
Number 9 is the most significant imho. There is lots of talk about restructuring the economy and growing manufacturing, but no plan how that will be done.