Tuesday, January 26, 2010
It's Over- By a Whisker
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

All the usual caveats about the first estimates from the Office for National Statistics apply, and the picture we have now is not one we will have in a couple of years time. Even so, a 0.1% rise in gross domestic product in the final quarter of 2009 was the smallest possible and shows a recovery that was more fragile than most (not all) expected. Everything except agriculture rose modestly, and that was it. More here.

Essentially these numbers show that the economy - even on the official figures - has been flat since mid-2009, a 0.2% fall in Q3 GDP followed by a 0.1% rise in the fourth quarter. They make a technical "double-dip" more likely, though a flattish first quarter is more probable.

2009, with a GDP drop of 4.8%, was the worst since post-war records began. We will not know until the revisions come through how the recession as a whole ranks in the pantheon of post-war recessions. In terms of longest, the first quarterly fall in the mid-1970s recession was in Q3 1973 and the last fall was in Q2 1976, though there were rises and falls in between. The same applied to the recession of the early 1990s. The first quarterly fall was Q3 1990 and the last fall was Q2 1992, but there were a couple of rises during that period.

With a 6% peak-to-trough decline in GDP, the recession is exactly on a par (on current figures) with that of 1979-81.