Writing in The Times, David Smith looks at the British economy and finds it standing up rather well. The next quarterly growth figures wouldn't match the brisk 0.6% of the first quarter, he predicted, but they'd be decent enough — proof of resilience, given that the closure of the Strait of Hormuz and the energy shock that followed had looked, in his words, pretty desperate. He then does the responsible commentator's thing and lists the dangers: drought, further shocks from the Iran war, and the looming October Budget. Don't count the chickens, he warns.
He's right about the chickens. I'm less convinced about the resilience.
https://www.thetimes.com/business/economics/article/uk-economy-gdp-budget-john-healey-lgjn2tqs3
The growth that always turns up in January
The answer to Smith's prediction has since arrived. The ONS put Q2 growth at 0.4%, down from 0.6%. Decent enough, as forecast. But that first-quarter number was never quite the trophy it looked. Since 2022, UK growth has been reliably strongest in the first three months of the year and reliably flat by the third — a pattern economists have noticed, cannot fully explain, and quietly suspect is a residual seasonality problem in the data rather than a burst of national vigour every February.
So we're building a story about British toughness on a figure that may partly be a statistical artefact, and then congratulating ourselves when the following quarter is merely a third smaller. This isn't resilience. It's an economy that hasn't fallen over, which is a different and much lower bar.
The "upbeat" labour market that keeps shedding people
Smith's supporting evidence is recruitment and employment surveys, which is where the argument gets thin. The official data tells a bleaker story. Vacancies have fallen to around 707,000, the lowest since the tail end of the pandemic and below pre-Covid levels. Payrolled employees are down roughly 94,000 on the year. Unemployment has drifted up to 4.9%.
Business surveys measure sentiment; PAYE data measures whether firms are actually paying anyone. When the two disagree, I'd back the payroll. What we have isn't an upbeat jobs market — it's employers who haven't yet made redundancies but have stopped hiring, which is what a freeze looks like from the inside before it looks like a recession from the outside.
The drought is not a footnote
Smith lists drought among the pitfalls, and this is where he undersells his own case. Roughly 71% of England is officially in drought, with more than 27 million people under water-use restrictions after the driest July on record. That's not a weather anecdote — it's an input constraint on agriculture, food prices, construction, and the water-hungry data centres we've spent two years promising will save the economy.
We have built an entire growth strategy on infrastructure that requires abundant water, in a country that has now had two consecutive summers of not having any, run by companies that leak a fifth of it. Add John Healey's first Budget on 28 October, arriving with a widely-reported £24bn gap in the spending plans, and the second half of the year looks less like resilience and more like a lull.
Final thoughts
"Resilient" is a genuinely useful word. It lets you describe an economy that isn't growing without saying so, and it flatters everyone — the Chancellor, the forecasters, the commentators who called it. Britain has become extremely good at absorbing shocks without ever recovering from them, and we've decided to call that strength.
Smith is a careful writer and his list of pitfalls is a good one. I'd just note that when the caveats are longer and more specific than the case, the caveats are the story.
