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Ben Chu: Harvesting the GDP figures

Ben Chu
Friday 01 March 2013 00:15 GMT
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Outlook Cherry-picking season seems to have arrived.

Some commentators sympathetic to the Chancellor's economic strategy have seized on this week's gross domestic product revisions by the Office for National Statistics to argue that if one strips out the downward drag of oil and gas output, we didn't have a double-dip recession at all early last year.

But hang on a minute. Why just strip out oil and gas post-recession? Why not pre-recession too? According to ONS data, GDP growth was also stronger before the financial crisis if one removes the impact of the oil and gas. From the first quarter of 1997 to the first quarter of 2008 Britain's GDP grew by some 40 per cent. Excluding oil and gas, the output expansion in those years was 44 per cent.

I don't recall those commentators who now deny that the UK economy ever double dipped complaining during the pre-crisis boom that the GDP figures in the Labour years were being misleadingly suppressed. Which rather makes one wonder why they're so eager to expunge the negative impact of the energy-generation sector now? Nor, further, were the rosy growth predictions they, like the Office for Budget Responsibility, made in 2010, based on GDP excluding oil and gas.

Be careful when you go cherry-picking that you don't choke on the stones.

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