Thread by @ChrisGiles_

Why is the UK economy performing worse than other countries during the coronavirus pandemic?

Is it just a question of measurement?

tl:dr No

1/ ft.com/content/c5d72d… via @financialtimes

@FinancialTimes UK GDP is still 9.7 per cent below pre-pandimc level - much worse than most other countries

BUT

And one for @Gilesyb, Nominal GDP is in line with other countries

THIS suggests something is up with the GDP deflator

2/

@FinancialTimes @Gilesyb There is something up with the public sector element of the deflator.

UK health deflator is running at 91%

Yes 91%

Because high Covid spending is paired with low levels of operations and GP visists

3/

@FinancialTimes @Gilesyb But that's not the only thing going on...

UK household consumption - nominal and real - is much worse than other countries...

...paired with poor performing imports, and strong retail sales suggests foreign travel is extremely low

4/

@FinancialTimes @Gilesyb But that's not the only thing going on...

UK household consumption - nominal and real - is much worse than other countries...

...paired with poor performing imports, and strong retail sales suggests foreign travel is extremely low

4/

@FinancialTimes @Gilesyb riains ghte question - what is internationally strong if household spending is weak and NGDP is in line?

It's government consumption....UK spending has risen in nominal terms in a way not seen in other countries...

without better coronavirus performance

5/

@FinancialTimes @Gilesyb The scale of this is extraordinary - 15% increase in government consumption in the UK but hardly any elsewhere...

For those worried that @hmtreasury has lost control of public spending, this will provide some additional ammunition

ENDS

@FinancialTimes @Gilesyb @hmtreasury In fifth tweet - supposed to say "raising the question" - thanks for all those praising my typing skylls