In normal times, George Osborne would have been all over the good news from the manufacturing sector like a rash. The figures from UK industry were better – a lot better – than the City had been expecting and showed the fastest month-on-month increase in almost four years.
So where was the instant statement from the chancellor praising the strength of the economy and the success of the government’s strategy? Sherlock Holmes would have had the answer. Osborne’s unusual reticence was a classic case of the dog that doesn’t bark.
Put simply, good economic news doesn’t really suit the chancellor at the present juncture. His narrative is that the risk of Britain leaving the European Union has left the economy trembling on the edge of the precipice and for that story to stick he needs signs that consumers and businesses are taking fright at the risk of Brexit.
Unfortunately for Osborne, the recent data is not at all helpful. Better weather brought consumers out in their droves in May, according to the British Retail Consortium. Now the Office for National Statistics has reported that industrial production was up by 2% between March and April at a time when the markets had expected output to be flat.
To be sure, there are reasons to be a bit cautious about the ONS data. Monthly figures tend to be choppy. Cold weather in April boosted energy demand and there was a sharp jump in production of drugs, a notoriously volatile sector of manufacturing. The quarterly increase in production of 0.7% was less impressive than the monthly increase.
Even so, there was a positive story to be told. As Zach Witton, deputy chief economist at EEF, the manufacturers’ organisation, put it: “While the size of the gain is surprising it generally fits with the picture that the worst may now be behind the sector. It also backs up the feeling that there are no concrete signs that uncertainty associated with the upcoming referendum has had a major impact on manufacturing.”
Industry has had a really tough time in recent years. Production is still almost 10% below where it was when the great recession began in early 2008. Upbeat news has been thin on the ground, yet when some arrives it seems the chancellor would prefer to ignore it. Truly, these are curious times we live in.