Symbolism of a stagnating economy

By Hugh Pym
Economics Editor, BBC News

In one sense these figures won't affect the lives of shoppers and workers.

They refer to the three month period ending in June. That won't change people's experiences of the economy.

And you could say there isn't much difference in practice between marginal growth and no growth.

But the figures are highly significant for the economy.

They show that household spending actually fell in the quarter, further evidence of the sharp squeeze on consumers.

There was a positive contribution from overseas trade, but only because imports fell sharply, not because of any great boost to exports. Falling imports is another indicator of faltering consumer demand.

Economic record

And there is a major symbolic aspect to the zero growth announcement

This government liked to highlight the unbroken run of growth going back to 1997, when it came to power, and five years before.

It is a record unmatched by any other leading economy.

That run has now come to an end. Few would predict when it will pick up again.

Of course these figures could yet be revised again, perhaps back upwards. But all the signs suggest that economic growth is on a downward path.

The third quarter, which we are now in, and the fourth could well turn negative, signifying a technical recession.

Even if flat or slightly positive, this year's growth will be the weakest since 1992.

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