Straws of hope from GDP


Anyone who still wants to be optimistic about the UK economy after today has two important facts to cling to.

The first is that these early estimates are likely to be revised - and at least some in the city think the revision is more likely to take the number up than down. Regular readers will be thrilled that our old friend, the construction sector, is in the frame again - the sharp fall in output in this sector in December is very much an estimate, which some consider a little fishy.

The second point of potential hope is that these numbers deal with the past. They do not necessarily tell us much about the future.

Taking away the one-off boost from the Olympics, the figures suggest that the UK economy was broadly flat in the second half of the year.

There have been mixed signals from the real economy in recent weeks, but few in the City are now predicting a dramatic downward lurch. The broad sense is of an economy that is treading water - not one that is about to drown.

A second consecutive quarter of falling output is possible - the much talked about triple dip. But as the Bank of England governor has pointed out recently, that is quite likely in an economy that is broadly flat.

The IMF expects Britain's national output to be 1% larger at the end of this year than at the start, and to grow by 2% in 2014.

Even that would barely take the country back to where it was at the start of 2008. But it is faster than any major economy across the Channel - the eurozone is collectively expected to shrink in 2013, with little or no growth even in 2014.

Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

So it's goodbye from me

After 11 years at the BBC, I'm leaving for a new role in the City.

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  • rate this

    Comment number 51.

    Treble dip recession is a dead cert. It's all about confidence. The players are always talking the market up. The average man and woman int he street just wants to know that their house and money in the bank is safe. So split the banks NOW!

  • rate this

    Comment number 50.

    Why is it that economists are totally blind to.. ECONOMICS!

    I blame the way that it is taught. They seem constitutionally incapable of seeing the wood for the trees.

    We are at the start of a DEPRESSION like the one that Japan has been in for the last 2 decades AND FOR THE SAME REASON.

    Till we break away for valueless money and back to sensibly priced money we will remain in a depression.

  • rate this

    Comment number 49.

    A great investment would be an extra £1bn to HMRC so they can claw back all these unethical tax avoidance schemes am sure within a few years they could get 10 times the return. !!!

  • rate this

    Comment number 48.

    The latest oozlum-bird economics proposes that QE will be considered a success so long as commodity prices continue to rise..
    .. until that crunch moment when we can no longer eat and economic activity for the majority grinds to an inevitable halt!

  • rate this

    Comment number 47.

    I don't believe it

    Brown pledging prudence and an end to short termism & with a budget deficit of a massive £25 bn ... and a 5 year deficit reduction plan.

    You couldn't make it up

  • rate this

    Comment number 46.

    "I was just rummaging through the loft for the Guy Fawkes hat, cloak and lantern set before jumping on the plane to Davos when news of Nouriel Roubini's input reached me."
    Sorry, its not on the Beeb.
    Try: -

  • rate this

    Comment number 45.

    To solve the economic mess which we are in:-
    Cancel all foreign aid and all payments to the EU.
    When the books are balanced then consider what we are going to support or fund.

  • rate this

    Comment number 44.

    As a Scot, I'm glad we'll get the chance in 2014 to leave this rotten union and its incompetent leaders.

  • rate this

    Comment number 43.

    37. Right, got over that. Very amusing.

    Let's say I have a credit card bill of £10,000, the usury is £1,000. But being a part time arborist, I only earn £1400. My cost of living is £500 so each year I have to borrow more (+ interest), £100, to pay the interest on the debt (without actually paying off the debt). Am I,
    a. secure and in 'growth'.
    b. bankrupt.
    c. applying for a job at the IMF.

  • rate this

    Comment number 42.

    "People place far too much importance on the GDP figure ...Look at some of the positive comments from Goldman Sachs ,Draghi,etc.Look at the employment figures,... Bullish stock markets.Highest for 5 years."
    Yes, we have all noticed that a minority elitist clique is doing very well out of the mirage of QE. Shame the banks have failed to pass the goodies on to the rest of us!

  • rate this

    Comment number 41.

    naut 35
    Ah, I see. A seriously bad G Brown look alike caused the financial crisis. Seems a bit unlikely.

  • rate this

    Comment number 40.

    Lets have some facts: the labour government did not create the finical crisis, it was the sub prime mortgages in the USA.
    This happened because bankers did not assess risk ( That is there Job)
    The mistake that every government ( except for Iceland) made was they then moved the debt from the banks to the taxpayer.
    every government is supporting business and not the people they should be serving

  • rate this

    Comment number 39.

    People place far too much importance on the GDP figure,especially as it is always revised,and usually upwards.
    Look at some of the positive comments from Goldman Sachs ,Draghi,etc.
    Look at the employment figures,look at the world wide Bullish stock markets.Highest for 5 years.
    The BBC always seem to want to talk down our economy,how about a bit of positive sentiment.

  • rate this

    Comment number 38.

    This is Steph's most optimistic article on the UK economy for a long time. Despite the Eds comments

    Next suggested title - "UK economy: Worst Over?

  • rate this

    Comment number 37.

    "The IMF expects Britain's national output to be 1% larger at the end of this year than at the start, and to grow by 2% in 2014."

    Hahahahahahahahahahahahahahahhahahahahahhahahahahahahahahahahahahhahahahahhahahahahahaa... oooohhh.... hahahahhahahahahahahahahahahhahahahahahahhahahahahahhahahahhahahahahhahahahahhahahahahhahahahahhhhahahahhahahhahahahhahahhahahahhahaha... aaaaahhh.

    Nice one.

  • rate this

    Comment number 36.

    George O is talking ' b - - - s' and it has nothing to do with Ed !

    We are struggling because we are cutting everything in sight and not working at growth! Now there is a non-banker's view.

  • rate this

    Comment number 35.

    Some serious economics - just to remember how we got here

  • rate this

    Comment number 34.

    I was just rummaging through the loft for the Guy Fawkes hat, cloak and lantern set before jumping on the plane to Davos when news of Nouriel Roubini's input reached me.

    He's spot on and I can't possibly blow him to smithereens so the trip is off.

    Let's face it , Davos and the schmooze crew are kept afloat on a massive balloon of QE and their inflated egos!

  • rate this

    Comment number 33.

    @27 You may not have a 0.5% rate on your products but this is the rate your bank finances from the BOE ECB and FED in return for useless collateral and if we struggle with recovery at 0.5% wait until interest rates reflect normal historical economic climate (4-5%) then lets see whos swimming without their clothes on to coin a popular phrase.

  • rate this

    Comment number 32.

    "Muppite" is absolutely right! The bankers and, especially, the selfish POLITICIANS who got GB into this catastrophe and whose successors are still shrinking from taking the electorally unpopular measures that might just reverse our downfall should be brought before a Special Supreme Court, found guilty, and jailed. As a first step, the so-called government should CEASE TO BORROW ANY MORE MONEY!


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