MYSTERY OF WHY CAR OUTPUT AND REGISTRATIONS DATA NOT BEING UPDATED

The latest economic indicators data to be released by the Office for National Statistics show little sign of genuine recovery.

As Gordon Brown confirmed the worst-kept electoral secret of the decade today, the latest UK economic statistics on growth, demand and price inflation made gruesome reading for those who know their way around the data. The Department for Business has been conspicuously quiet since their release at 9.30 this morning.

Although ‘consumer-measured’ price inflation fell from 3.5% to 3%, only low interest rates on mortgages and the lower VAT rate managed this feat: the retail inflation level remained steady (and too high) at 3.7%. This is probably retailers, faced with smaller volumes, using ‘shoulder’ prices to recoup margin…and the last inflationary effects of QE trickling through.

The smaller volumes reflected falling demand, especially for textiles and clothing. This was exacerbated by falling petrol demand (a response to high prices and weather) and ‘others’ – a section where, crucially, small business tends to be found. Without drink and tobacco to prop things up, the numbers look very poor indeed.

Falling demand was in turn confirmed by a fall in the physical production sector of the economy…the part that is way too small already. Car output and registration data (say the tables from the ONS) ‘are no longer being updated’. Well there’s a thing – I wonder why?

Retail ‘growth’ figures, by contrast, were headlined in today’s press release. These do show a retail growth of 0.7%, but the majority of it is coming from internet purchases – up a staggering 6%. Given what this rate of growth means for commercial property in the UK, The Slog still finds it worrying that assurance companies and pension providers have piled into the sector as ‘an area of potential growth’. It is in reality an asset bubble about to go bang.

The bottom line is that the real economy is flat, retail is being carried by online, and inflation is not coming down. So even if we could afford it, Mervyn King would veto any further QE. And without that QE, things don’t look very pretty at all.

We used to call this ‘stagflation’ in the old days. I wonder what the Government’s electoral spin machine will be calling it going forward?