26 Jan 2010

Britain squeaks out of recession but is this the double-dip?

Again the economic experts are confounded by the sheer durability of Britain’s economic malaise.

By the narrowest possible margin* Britain has squeaked out of recession. It’s entirely possible we could actually still be in recession, once further revisions are made in the coming weeks.

An appalling number, saved by some growth in public sector and the motor retail trade. The breakdown of the GDP figure shows the recovery in construction has collapsed.

This is totally consistent with the dreaded double-dip, except of course that presupposes that there has been some sort of peak from which the economy dips again. There really hasn’t been.

This may just be a taste of things to come for the UK – a prolonged period of rotten stagnant growth, as predicted by Richard Koo last year.

But double-edged for politics. Brown and Darling haven’t pulled off an amazing rescue act, yes. But this undercuts the argument for savage, immediate spending cuts – the Conservative argument.

The areas that dragged the economy even to this minute growth were areas supported by stimulus spending.

And there are some total mysteries. How on earth is unemployment stabilising? Why are house prices having a mini-surge?

This is an incredibly important and significant economic number that could change the political debate.

*Only one economist predicted 0.1 per cent, take a bow Danny Gabay of Fathom Consulting, who uses and abuses the Bank of England’s own mathematical model.

4 reader comments

  1. Anthony Martin says:

    Faisal, when people turn on their TV today to read the ceefax or, watch the news, the first channel they usually have on is BBC. (If only to get some brainwashing crap for that dictatorial licence fee) They will see the predictable headline ‘Britain Is Out Of Recession’. The headline that was manipulated towards. One that pleases the gullible fools in the south of England and, those in government.
    This headline is like the ‘unemployment count’, fiddled, warped, manipulated and controlled by the government spinning quangos.
    Those in the political driving seat have steered this country into a cesspit of hell.
    Unrestrained Capitalism is the precursor to slums, hatreds, inequalities and has bred a Dickensian scourge that now dominates most of society & resources.
    We can expect more bull-sh*t headlines in the lead up to the general election from the manipulated media, esp. the BBC.
    This recession is NOT over at all. All the time peoples lives are a misery and, people have very little money or, non at all, then this country is a shambles and a big lie. The rich scum who say the UK is anything other than a cesspit of hatreds and poverty, are lying, deluded, and spinning.

  2. adrian clarke says:

    What does 0.1% actually mean? How much is the monies poured into the economy by the government and their quantative easing and the regrowth of the banks figuring in this statistic?

    1. margaretBrandreth- Jones says:

      You have been saying for a long time that this may be a W don’t wish for it Faisal !

  3. Kes says:

    After a massive contraction, a 0.1% rounding error is not an upward move, so it is early to talk about recession shape. That said, it’s an L shape so far.

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