The Futility Monster

He'll pointlessly derive more enjoyment out of your resources than you

0.1%

Posted by The Futility Monster on January 26, 2010 @ 10:37

Shamelessly stolen from elsewhere, as usual

This morning’s GDP figures for the last quarter of 2009 estimate that the UK economy exited recession during it by a miserable 0.1%. And, as all us part-time mathematicians will know, that could be anywhere between 0.05 and 0.14. Doesn’t seem much, but a rounding error like that probably represents several tens of millions of pounds…

It had been widely predicted that this would happen, but once again no one expected it to be so low as to be only just the end of the recession. Having said that, this is just an estimate, and though it can go up or down at the next revision, I expect it will go up.

Even so, it’s hardly the glittering mandate Gordon Brown was hoping for. The final proof that he had successfully guided us through the dark days, and the boom times are here again. Far from it. The country needs huge growth from here on in to ease the pain of the debt mountain, and that isn’t going to happen.

So Gordon, this is your reward. You decided to “go long”. Or rather, you didn’t decide. I’m utterly certain that if there wasn’t the pesky issue of local elections on May 6, Gordon would go right to the bitter end, clinging desperately to the trappings of state in the hope that something will come along to save the day.

It hasn’t, and it won’t. The next GDP figures will be due out three months from now, and they won’t show much of an improvement on this.

But really it’s not the next quarter that we’re interested in. Everyone knows this whole year is going to be extremely tough. Job cuts will continue. Pay freezes will be the order of the day. And George Osborne’s emergency budget (assuming it is him…) promises to be as tight as a duck’s arse.

That sets the scene for the double dip. Consumer spending is not going anywhere this year. Even more so if inflation starts to lift off; if it does, those historically low interest rates won’t stay historic for much longer.

This really is not a good election to win, you know…

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