Autumn Statement 2013: what's happening to the economy?

9 December 2013

Last week Chancellor George Osborne reminded the nation of what looks set to be the Coalition's key election claim: "Britain's economic plan is working".

On the back of the latest economic figures and forecasts from the independent Office for Budget Responsibility (OBR), it was used as an opportunity to set out the progress the country is making on some of the key economic indicators.

We checked out some of the key measures to chart how the economy has performed since the start of 2008 - just before the downturn began in earnest.


George Osborne started out with the very measure used to define whether or not we're in recession: Gross Domestic Product (GDP). The headline claim, for the Chancellor, was the 'revised' picture since the Office for National Statistics (ONS) first reported on GDP growth over the last few years.

When the ONS originally published estimates, they suggested the total fall from peak to trough (that's the start of 2008 compared to the second three months of 2009) of about 5.3%  - the equivalent of losing about £70 billion in output over the same period.

Since the ONS revised the estimates (after new data became available), it turned out we contracted by as much as 7.2% - about £113 billion in lost output - as the Chancellor stated last week.

The so-called 'double dip' recession in early 2012 never happened thanks to these revisions.


As soon as he turned to employment, the Chancellor repeated a favourite claim: "Today in Britain, employment is at an all time high". We've already found claims like this to be fairly meaningless, since as the population grows, more people tend to be employed.

As for the employment rate, the picture suggests we're still below the record high of 73% of the adult population aged 16-64 from the start of 2005 and a similar rate at the start of 2008 before the downturn. The most recent figures from the ONS show that about 72% of the same adult population is in work.

This is the equivalent of 474,000 fewer people in employment now than if the employment rate were still at its pre-downturn peak.


Deficit reduction was "the most urgent issue facing Britain" according to the Coalition at the outset of its current stint in office. The deficit - the amount by which we spend and invest more than we get in - peaked at 11% of GDP or almost £160 billion in the 2009/10 financial year. Since then it's been falling. The latest confirmed figures show it was at 7.3% - or £114 billion - in 2012/13.

The OBR forecasts the expected size of the deficit till 2019, by which time it expects it to be gone altogether. This is obviously subject to some uncertainty - particularly given there could be a new administration from 2015 onwards. As the Shadow Chancellor pointed out last week, the reduction plan is already off course compared to what was originally forecast in 2010.

Real wages

The Shadow Chancellor's key focus was on the fall in real wages - the amount by which average weekly earnings have been outpaced by rising inflation. It's the same claim as in Labour's cost of living 'bombshell' advert - which we factchecked last week.

The problem with this measure is the numbers change significantly depending on which measure of inflation you choose to use. Using one of the more commonly-used: the Consumer Price Index (CPI), we can track the loss in earnings versus inflation back to the pre-downturn peak, again at the start of 2008.

Full Fact fights bad information

Bad information ruins lives. It promotes hate, damages people’s health, and hurts democracy. You deserve better.