George Osborne's response to news that Britain has finally recovered all the ground lost in the recession of 2008 and 2009 was notably for its lack of crowing.
A milestone had been passed, the chancellor said, but there is still plenty of work to do. This is a smart approach for a number of reasons.
For one thing, this has been the mother and father of a recession, and it has taken far longer than Osborne expected for the economy to respond to the Bank of England's cheap money medicine.
There have been four deep downturns since the second world war; two presided over by Labour, two by the Conservatives.
After the first oil shock in the mid-1970s, it took 12 quarters for the economy to finally return to its pre-recession level of output. After the recession in Margaret Thatcher's first term it took 16 quarters, and after the recession following the Lawson boom of the late 1980s it took 10 quarters.
This time it has taken 25. The second reason it makes sense for Osborne not to crow too much is that in terms of output per head of population, the downturn is still not over.
The population has risen since the economy went into recession in early 2008, and at the current rate it will be 2017 or 2018 before the losses in per capita GDP are made up.
The chancellor would very much like to see real incomes rise over the coming months, as that would help generate a pre-election feel good factor.
In the absence of that, the best he can offer voters is that the mess left behind by Labour is finally being cleared up and that, provided policy remains unchanged, things will turn out well in the end.
This is not an entirely convincing argument, but again it explains the lack of triumphalism. The recession of 2008 and 2009 was not simply the result of Gordon Brown "failing to mend the roof while the sun was shining".
Rather it was a global downturn that hit Britain especially hard because of the economy's overreliance on the housing market and the City of London – long-running trends encouraged by both main parties.
Osborne is clearly hoping that voters will forget the part he played in delaying the recovery – the increase in VAT, the deep early cuts in infrastructure spending, the misguided comparisons between Britain and Greece that affected business confidence – and he might be proved right.
In terms of growth, however, this is probably going to be as good as it gets for the economy this side of the election. There are signs of a slight easing of activity, and the Bank of England is mulling when to start raising interest rates.
The gap between wage growth and inflation has widened in recent months, while the strength of sterling has weakened exports.
That's not to say the economy is about to go back into recession, because growth looks like being solid over the coming quarters.
It is worth noting though that the government is reaping scant reward in the polls even though the economy has expanded by more than 3% over the past year and – according to the IMF – will be the fastest growing of the G7 economies this year.
theguardian.com
A milestone had been passed, the chancellor said, but there is still plenty of work to do. This is a smart approach for a number of reasons.
For one thing, this has been the mother and father of a recession, and it has taken far longer than Osborne expected for the economy to respond to the Bank of England's cheap money medicine.
There have been four deep downturns since the second world war; two presided over by Labour, two by the Conservatives.
After the first oil shock in the mid-1970s, it took 12 quarters for the economy to finally return to its pre-recession level of output. After the recession in Margaret Thatcher's first term it took 16 quarters, and after the recession following the Lawson boom of the late 1980s it took 10 quarters.
This time it has taken 25. The second reason it makes sense for Osborne not to crow too much is that in terms of output per head of population, the downturn is still not over.
The population has risen since the economy went into recession in early 2008, and at the current rate it will be 2017 or 2018 before the losses in per capita GDP are made up.
The chancellor would very much like to see real incomes rise over the coming months, as that would help generate a pre-election feel good factor.
In the absence of that, the best he can offer voters is that the mess left behind by Labour is finally being cleared up and that, provided policy remains unchanged, things will turn out well in the end.
This is not an entirely convincing argument, but again it explains the lack of triumphalism. The recession of 2008 and 2009 was not simply the result of Gordon Brown "failing to mend the roof while the sun was shining".
Rather it was a global downturn that hit Britain especially hard because of the economy's overreliance on the housing market and the City of London – long-running trends encouraged by both main parties.
Osborne is clearly hoping that voters will forget the part he played in delaying the recovery – the increase in VAT, the deep early cuts in infrastructure spending, the misguided comparisons between Britain and Greece that affected business confidence – and he might be proved right.
In terms of growth, however, this is probably going to be as good as it gets for the economy this side of the election. There are signs of a slight easing of activity, and the Bank of England is mulling when to start raising interest rates.
The gap between wage growth and inflation has widened in recent months, while the strength of sterling has weakened exports.
That's not to say the economy is about to go back into recession, because growth looks like being solid over the coming quarters.
It is worth noting though that the government is reaping scant reward in the polls even though the economy has expanded by more than 3% over the past year and – according to the IMF – will be the fastest growing of the G7 economies this year.
theguardian.com
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