Remember that thing called investment?

COMMENT

It was not just that the UK grew appreciably faster in 2013 than had been widely predicted at the start of the year; it was more that the components of growth began to suggest the UK economy was entering a new phase.

The headline was that household spending made the biggest contribution to the increase in activity during the year. It accounted for 1.5% of the 1.8% gain in total GDP. Other contributions were fairly minor: 0.2% from government spending, 0.3% from inventories, 0.1% from trade and a drag of 0.1% from a decline in fixed capital investment. At a glance, this does not seem to support my assertion we may be about to embark on a new stage of the recovery, but the annual contributions hide an important trend in one crucial area: capital spending. According to the statisticians, the final...