There is no economic growth! We’re in a recession!

Wednesday-Thursday blog

I hope readers can cope with some simple arithmetic. Because it seems that none of our elites – politicians, economists, journalists etc etc – are capable of even some basic adding and subtracting and even some division and mutiplication. I’ll do this in simple steps so even a politician, economist or journalist might be able to understand

Step 1: We’re told that the British economy grew by an ‘amazing’ 0.4% in the latest full quarter

Step 2: The UK GDP is about £3 trillion. So the GDP for one quarter would be about £750 billion (£750,000,000,000)

Step 3: Growth of 0.4% on this £750 billion would be around £3 billion (£3,000,000,000)

With me so far?

Now let’s look at just three areas where this £3 billion might have come from.

Area 1: The growth in public-sector employees.

Step 4: There are around 33,000 more public-sector employees (I won’t call them ‘workers’ for reasons you can probably guess)

Step 5: Let’s assume the average annual cost of each employee is about £50,000 – that includes salary, social costs, pension contributions and use of any equipment or office space)

Step 6: Then the total cost of these extra 33,000 employees in one quarter would be around £412 million

Area 2: Now let’s add in the illegal migrants

Step 7: There are about 46,000 more illegal migrants in Britain than a year ago.

Step 8: Let’s assume each illegal migrant costs us about £40,000 a year – acccommodation, spending money, food, free phones, legal costs and anything else they want

Step 9: Then the total cost of these 46,000 illegal migrants is £1.84 billion a year – £460 million per quarter

Just these two areas of increased public-sector spending give us just under £900 million of the £3 billion supposed GDP growth.

Area 3: Public-sector wage increases

But there’s a third area of increased public-sector spending – the average 6.3% increase in wages (excluding bonuses) for Britain’s 6.1 million public-sector employees.

Step 10: Total public-sector wages (excluding bonuses) is over £250 billion (£250,000,000,000)

Step 11: Between 2025 and 2026, average pay increase in the public sector was 6.3%. (It was only 2.9% in the private sector)

Step 12: So 6.3% of £250 billion gives us over £15 billion. Divide that by four to give the spending increase for one quarter and you get £3.9 billion.

Step 13: Cost of 33,000 more public sector employees plus cost of 46,000 illegal migrants plus cost of public-sector wage increases gives us somewhere around £4.8 billion. Yet the UK economy’s supposed 0.4% growth only gave around £3 billion.

Step 14: The UK economy didn’t grow during the last full quarter, it shrank. But the government managed to create the chimera of growth by wasting billions on migrants and the bloated, ever-increasing, ever-overpaid public sector.

Step 15: Where did all this extra money come from? Did it come from growth in the private sector? Nope. More than one hundred thousand private-sector employees (145,000) lost their jobs in the most recent financial year. So there was a contraction in what one might call the ‘real economy’. The extra money creating the illusion of economic growth came from the government borrowing about £42 billion in the second quarter of 2026 when the economy supposedly grew by £3 billion. Much of the £42 billion borrowed went to paying off the interest on the UK’s total debt of about £2.98 trillion. But there was a little left over to allow the government to increase migrant- and public-sector spending and claim the British economy was growing.

Conclusion: I’m not an economist. So you can accept or dismiss everything I’ve written above. But it seems to me that, by applying just a little common sense and some simple arithmetic, there wasn’t any real economic growth at all. In fact, I believe we’ve been in a recession in the ‘real economy’ ever since the first Reeves/Starmer job- and business-destroying horror budget and Labour’s migrant- and public-sector spending spree.