What goes down must come up – eventually. Marx and Engels hailed capitalism's "revolutionary" dynamism, though their adherents often ignore its extraordinary ability to bounce back. The crisis of 2008 tested that as never before, but Tuesday's GDP data confirmed that recovery is indeed under way, and suggested that – although the day is not yet upon us – Britain's economy could be bigger than ever before within a matter of months. This is, first of all, good news for a country that has had to live without growth for too long.
It is good news too, of course, for a government that gambled everything, with scant success until now, on being able to claim the economy is fixed by the 2015 general election. While that claim sounds less risible than a year ago, it remains not merely unproven but outright dubious. Before we even get on to the quality of the new growth – which Vince Cable is sagely questioning – it must be said that there is as yet no room for complacency about the quantity either. Since slumps do not halt progress in technology, still less make anyone forget past industrial advances, they are typically followed by an especially rapid burst of expansion, as companies make up for lost time in applying new ideas. That is, for example, what happened after John Major's recession, when output shot up at a rate of nearly 4% in 1994. After the deeper and more prolonged collapse this time around, an even sharper bounceback might have been hoped for.
But no, the headlines about the best growth in seven years were justified by expansion in 2013 of just 1.9%, which is actually below the historical average. There was no sign of acceleration in the most recent quarter, with growth actually fractionally lower than in the quarter before – and none of these numbers make any allowance for an expanding population. Factor that in, and the dip in output per head looks that much bigger again, and the recovery that much weaker. In sum, while the recovery is real, it is not yet particularly powerful, and – had expectations not sunk so far with the economy – it might be called anaemic.
The environment remains fragile – witness market jitters over developing economies, and Tuesday's clutch of worrying numbers about the US economy. But the smart money remains on 2014 proving somewhat stronger than 2013, which should be enough to allow the coalition to recast its pitch, from the defensive "things could be even worse with Labour" to the more confident warning that "the other lot would throw the recovery away". The opposition could be left arguing that the recovery would have been here sooner without George Osborne's overzealous cuts, a justified claim analytically, but the sort of counterfactual that rarely cuts through with voters busily worrying about the here and now.
The smarter criticism quibbles not with the pace of the recovery, but its direction. The chancellor's cheerleaders now dismiss the "rebalancing" he once promised as a hopelessly abstract dream, and – despite a grotesquely swollen balance of payments deficit – no British politician can credibly promise an export boom while the prime eurozone market remains in such a mess. But as stagnant productivity holds back wages, and with many cities entirely missing out on restored prosperity, there is one ingredient missing from this recovery that a more ambitious administration might do something about – investment.
The lack of the sort of industrial strategy that might stir the private sector to sink serious cash into new kit was underlined when Stephen Hammond, the rail minister, unveiled a new German-built train for London's rail network; that rolling stock could and should been have been assembled in Derby. And in terms of the state's more direct role, within the strictures of Ed Balls's questionable new budgeting rules, there is at least room for Whitehall to expand capital spending. In its heart, the UK now understands the dangers of "shop till you drop" expansion. The time is right to explain that the new growth will not be secure until Britain invests in its future.
