Things look better for the UK but it's hard to get excited

Following that unexpected services boom, there are predictions of 0.1 per cent growth in the first quarter.

But it's hard to get excited about growth of a tenth of a percentage point. As Allister Heath notes, we're likely to see more than weak economic growth over the next few years:

Three key UK key sectors are dragging down the rest: finance, construction, and oil and gas. Their woes have helped to mask the limited growth in some stronger parts of the economy. Proper growth in at least two of these three areas would be essential to converting the current stagnation into modest expansion. The most likely first candidate for such a recovery is probably construction: there have been some very early indications that some of the coalition’s planning reforms might finally be starting to have an effect, but it remains too soon to come to a firm conclusion.

The reality is that the UK economy is set for a lengthy period of almost unbearably weak growth. We will crawl along for the next few years, dragged down by a range of factors that include high inflation that is eroding real wages and savings, financial repression which is diverting resources into financing the state, an overhang of bad debt, an ultra-leveraged overall economy, a crazy planning system and other disastrous red tape, a high tax and government spending burden, a decision to make energy far more expensive than it needs to be, a regulatory-imposed squeeze on bank balance sheets and a continued onslaught on the City. Under such circumstances, sustained and genuinely strong growth – and I’m not referring to the odd jump in output – is simply impossible.

(Full article)