GDP Growth? No, We’re Already in a Recession
Our political and media elites are trying to make us believe that the UK economy is still growing in spite of Labour’s 2024 budget growth-crushing, business-destroying £40 billion tax rises and mad Ed Miliband’s courageous crusade to crush British homes and businesses with the highest energy prices in the world. So let’s try doing some simple arithmetic to test whether the economy really is growing.
UK GDP for the year will probably be around £2.8 trillion. That’s about £700 billion a quarter or £230 billion a month. If GDP had grown by say 1% in August that would have been £2.3 billion growth. But GDP reportedly grew by just 0.1% in August, so that’s GDP ‘growth’ of £230 million.
One key growth area in our once great, but now bankrupt, country is in the ‘we can’t work cos we’re ill’ benefits brigade. Around 1,000 more apparently poor suffering individuals are reportedly being signed up for PIPs (Personal Independence Payments) each day. But these 1,000 a day are only the tip of the proverbial ‘can’t be bothered to work’ iceberg. Google tells us that:
Approximately 1,000 people a day are being awarded Personal Independence Payment (PIP), a sickness-related benefit, a significant rise in claims due to mental health conditions like anxiety and depression. This number has more than doubled since before the pandemic and is contributing to an overall increase in the number of people receiving sickness and disability benefits. A separate report from late September 2025 indicates that long-term sickness claims may be rising by as much as 5,000 per day.
So, let’s try a bit of simple arithmetic. We’ll assume that in August around 120,000 people (5,000 per day multiplied by 24 ‘working days’, or should that be ‘not-working days’?) joined the ‘we’re really too sick to work’ club. Let’s imagine each of these individuals is receiving say £200 a week (£800 every four weeks) – even though most will be getting much more than that. In the first week of August these fine folks would have cost us £5 million. In the second week, £10 million. In the third week, £15 million. And in the fourth week, £20 million. In total these good folks would have caused a £50 million increase in government spending. This is almost a fifth of our supposed GDP growth of £230 million for the month and is, of course, money we don’t have. So we are forced to borrow this money at higher rates of interest than are paid by such bastions of fiscal probity as Greece, Italy, France and Spain.
So, just the increase in paying benefits to those being signed off for supposedly being too ill to work accounts for close to a fifth of August’s supposed ‘GDP growth’.
As if this was not bad enough, another great growth area in Britain is in the number of illegal migrants being brought into our wrecked country. Each year around 55,000 mostly men of military age are being ferried across the Channel into Britain by our useless Border Farce and the RNLI. Let’s assume each of these wonderful multicultural enrichers is costing us about £200 a day in accommodation, food, clothes, new mobile phones, free healthcare, entertainment, pocket money, taxis and much more. That means in the first week of August the 1,000 a week increase in illegal migrants cost us about £1.4 million. In the second week, about £2.8 million. In the third week, about £4.2 million. And in the fourth week, around £5.6 million. That’s a total of perhaps £14 million. The cost of just August’s increased illegal migration is about 6% of the £230 million GDP growth for August. And, like the huge increase in sickness benefits, that of course is money we don’t have and so are forced to borrow at higher rates of interest than are paid by such bastions of fiscal probity as Greece, Italy, France and Spain.
But probably the most impressive growth area in our collapsing economy is the massive increase in salaries being paid to our possibly underperforming, often work-from-home, dubiously-competent, ever-growing number of public-sector employees. The total public-sector pay costs are somewhere around £300 billion. These have increased by over 5% between 2024 and 2025. That’s more £15 billion a year – above £1.25 billion a month. This £1.25 billion a month is more than five times the August 0.1% supposed economic growth of £230 million.
So, just using some simple arithmetic, it would seem that the productive part of the economy is actually in a deep economic recession. But the illusion of economic growth is being created by massive Government borrowing to pay for the three areas in Britain which really are experiencing impressive growth – the increase in the number of people being signed off sick, the increase in illegal migration and the huge inflation-busting pay rises given to the ever-increasing number of Labour’s chums in the public sector.
I wonder why none of the highly-educated, highly-paid political, academic and media elites have noticed this?
David Craig is the author of There is No Climate Crisis, available (for now) as an e-book or paperback from Amazon.
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I care very little about “GDP”
Talk about GDP per capita and I might be more interested
Any fool can increase the population and pretend the economy is “growing”
Are people on average in the U.K. better off than before?
Certainly we have no shortage of fools.
And liars.
No, the people in the UK are getting poorer as they are across the EU as Net Zero costs us more and more.
Net zero, welfare, lockdowns etc
‘we can’t work cos we’re ill’ benefits brigade
It’s a rational response to the government’s endless and unlimited importation of the “Wonderful People”.
If you work hard to provide for yourself and then find it all being whittled away in taxes (on savings, on investments, on property, on pensions etc.), there’s a lot of incentive for people just starting out to sit back and let the government provide.
While not part of GDP, the other guilty secret this Government doesn’t like to talk about is how much of our debt is index linked, 25% or five times as much as the US and Germany, so not only do we have high debt interest to pay, a quarter of the debt (£620 bn at last count) is increasing each year rather than remaining the same or being paid off. As we are having to borrow to pay the interest bill each month, that means £600bn of debt is going to need about £642bn to roll over next year and £690bn the year after. Some back street money lenders would be embarrassed by that arrangement
And meanwhile printing money to pay off principal sum when due, which debauches the currency, devaluing it – a stealth tax.
Yes, the idiot Boy ‘pasty tax’ George thought he was being smart in index linking our debt being so dumb he ignored the possibility that inflation might at some point increase.
He obviously believed The Moron when he said he had abolished Boom and Bust.
So we got a BOGOF …. two Morons for the price of one.
The other side of the public index linked debt includes LDIs (Liability Driven Investments):
https://www.investopedia.com/terms/l/ldi.asp
They are needed for the Defined Benefit pensions given to those in the Bank of England. And it was the threat of increased LDI costs from increased interest rates from the Truss mini-budget that panicked the Bank of England into ambushing her.
Economists repeatedly point out that GDP – apart from being a very crude metric – includes Government spending. The assumption made is that the output from Government spending = input. In other words, in our crazy Socialist economy, a cost = a profit. Because of this assumption, Government spending can never make a loss. It also means there is no way to determine whether the NHS, for example, is producing a value higher or lower than its cost, and so no way to measure whether it is efficient or making a loss that is making us all poorer. It is this assumption about Government spending that leads politicians and alas most of the public to believe the only way to get more out of public services is to put more into them. This allows politicians to campaign on spending more on NHS and education for example, and to vote for them, and how they justify increasing taxes – particularly for the rich – and borrowing more. And this is why we have £2.8 trillion debt, and why in the current fiscal year, April to date, the Government, or rather the population has borrowed £99.8 billion and used £55.3 billion of… Read more »
The managed decline continues.
You only have to walk around our town centres to grasp that the country is already in recession and probably heading for a depression.
It’s not going to get any better until this God of the Copybook Headings returns, either carefully and systematically through policy changes, or it will happen suddenly as it has throughout history:
Let’s see where all the money has gone. Today the head leech is back in London being feted by our leaders as they pour yet more of our borrowed money into the self-inflicted horror of the ongoing destruction of Ukraine’s ill-lead (by leaders who are not Ukrainian bar one or two) youth. Note that fewer than a quarter of Ukrainians still support the war. Then there is the hubris of Net Zero and the nonsense that is the demonisation of the gas of life, further reduction of which brings closer the death of all plant life and the rest of the biosphere. And now coming up on the rails is the existential war against Russia, being pushed by people who need lessons in critical thinking because war between the two nations with civilisation ending nuclear arsenals should be understood by everyone to be avoided at all costs because there will be no winners and not being prepared to accept this will make death inevitable.