UK one of worst-performing economies in world since 2017 election, figures reveal
UK ‘in the relegation zone’ for economic growth and must change the manager, says TUC
The UK is one of the worst-performing developed economies in the world since the last general election in 2017, new analysis has shown.
Annual growth has come in at just 1.3 per cent – less than half the average of 2.7 per cent among members of the Organisation for Economic Cooperation and Development (OECD), a club of wealthy nations. That put the UK 31st out of 35 OECD nations in the period since Theresa May unexpectedly lost the Conservatives’ parliamentary majority.
Almost every OECD nation has outperformed the UK on exports and levels of investment, which have slowed markedly as a result of uncertainty surrounding Brexit.
The Trades Union Congress (TUC), which compiled the figures, said a decade of austerity, Brexit mismanagement and a fragile global economy had caused a slump in business confidence.
Frances O’Grady, the TUC general secretary, said: “The UK economy has fallen into the relegation zone – and you have to blame the manager. The current government is leaving the economy in a dismal state.
“When Britain needed to invest, they chose corporate tax cuts. And when Britain needed to rebuild, they chose more austerity.”
The picture has been particularly bleak for investment, which fell at an annual average rate of -0.2 per cent between the second quarter of 2017 and the same period this year. By contrast, the rest of the OECD nations averaged 3.4 annual growth during that time.
Once public and housing investment is stripped out, UK business investment was even weaker over the period, falling at an annual rate of -1.3 per cent.
“We need leaders who will take on the UK’s rigged economy,” Ms O’Grady added. “And we need a plan for world-class public services, modern industry and decent jobs.”
Workers have paid the price for lacklustre growth, the TUC said. That claim was supported by separate analysis from the Resolution Foundation, published on Thursday. It forecasts that British workers will only see average wages surpass their 2007 peak in November or December this year – finally bringing an end to the longest period of stagnant wages in 200 years.
While Brexit is seen as the key battleground of the upcoming general election, the economy will also be significant.
Average hourly pay among workers under 40 years old – who have polled heavily in favour of the Labour Party since the last election – are still being paid less than the same age group were before the financial crisis.
Average pay across the southeast, Northern Ireland and the East Midlands regions is still well short of its pre-crisis health, the Resolution Foundation said.
John McDonnell, the shadow chancellor, said: “The Conservatives’ mismanagement of both the economy and Brexit is having a disastrous impact on our economy, undermining wages, jobs and living standards.”
Nye Cominetti, an economic analyst at the Resolution Foundation, said: “Britain’s post-crisis pay downturn has been deeper and longer-lasting than anyone could have predicted, and caused a major squeeze on household incomes across the country.
“After 12 long years, Britain is finally on the brink of returning to ‘peak pay’. This is a big living standards milestone and a relief for households after an unprecedented pay downturn.
“But politicians tempted to use the return of ‘peak pay’ to claim that Britain ‘has never had it so good’ should remember that pay for millions of workers is still below pre-crisis levels, and that our pay downturn has left average pay £138 a week off track.”