The Guardian view on Britain's economy: to profit politically a recovery must be felt in people's pockets | Editorial

In October 1991, Norman Lamont suggested Britain was seeing early signs of recovery, but he was mocked during a deep recession. The phrase “green shoots” became associated with leaders celebrating progress before ordinary people felt improvement. Similar claims were later made by politicians after austerity and periods of growth, including statements by George Osborne in 2013 and Rishi Sunak before the 2024 election. After Labour’s landslide win, Rachel Reeves argued that her plan is working and cited International Monetary Fund approval. Optimism is tempered by weaker early indicators, including unemployment rising to 5%, youth unemployment with one in seven seeking work, falling vacancies to the lowest since early 2021, and expected slow growth in real household disposable income over the next five years.

"In October 1991, the then chancellor Norman Lamont said he thought he saw some green shoots of recovery. He was ridiculed, as Britain was in the midst of a deep recession that it would not clamber out of until the following summer. Insouciant in the face of the scorn heaped upon him, Mr Lamont defended himself robustly, even long after the event not least by writing letters to this newspaper. Despite this valiant defence, green shootism became notorious because it suggested a ruling class that was congratulating itself well before ordinary people felt a recovery."

"This has not stopped politicians since 2010 from claiming that Britain was bouncing back from the series of shocks it has experienced. After austerity had produced economic stagnation, George Osborne, the Tory chancellor in 2013, seized on a few quarters of growth to claim Britain was turning a corner. Just months before the 2024 general election, Rishi Sunak, the Conservative prime minister, said that the country was starting to see the green shoots of recovery. Voters resoundingly rejected that claim when Labour was elected in a landslide."

"The current chancellor also risks sounding too rosy to a populace made glum by a lost economic decade. After last week's better than expected growth figures, Rachel Reeves made the case that her plan is working, citing with satisfaction the approval of the International Monetary Fund. Some of this fighting talk might be about Ms Reeves's position being under threat if there is a change of Labour leader. Yet it remains too early to tell whether her economic strategy has been vindicated."

"The early signs are less than propitious. Unemployment unexpectedly rose in the last quarter to 5% with one in seven young people now looking for a job. Vacancies are down to their lowest since early 2021. The Resolution Foundation says real household disposable income per person is expected to grow by only 1.1% cumulatively in the next five ye"

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