Well not a lot really. It is not the magnitude of this figure which is important, nor its polarisation but rather what it means on a political level.
This figure in its own right doesn’t (and cannot possibly) tell us whether the UK is out of the recession. It is subject to the confidence levels used as well as new data becoming available in the coming months. This only leads us to revise the figures in a few months when the first quarter results are published with the tax revenue obtained.
But politically the figure is extremely important. For Labour the figure can be interpreted to not slash public spending as much as the Conservatives have suggested. In a Keynesian approach, cutting public spending at this time, they say, would choke off the recovery even before it has started.
In the blue corner however, this figure has highlighted how little impact the measures of the government i.e. quantitative easing, continued public spending etc have had. Granted, while we do not know the counterfactual, the Conservatives feel that a far more important tack would be to improve the government’s finances thus safeguarding the international credit rating and improving the investment opportunities from abroad.
All in all the figure does not tell us a great deal economically or statistically. However the political implications are substantial. As January 26th 2010 was a hotly anticipated date in all politicians’ and economists’ diary, April 23rd will be equally so when the first quarter’s GDP data is published just weeks before the anticipated general election.