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

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

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  • rate this

    Comment number 231.

    My econometic modelling supports the view of the IMF that the UK's GDP will grow by about 1% this year and 2% in 2014 and this will be among the highest growth rates in the EU albeit still low historically.

  • rate this

    Comment number 230.


    A zombie company is a bankrupt company and there are laws that prescribe the limited number of way to fix such a concern including killing it - in the way set out in law. I'd explain it to you in detail except I am prevented from doing so by the BBC's 400 ch. limit.

    It is an offence to continue to trade a company that has committed an act of bankruptcy this incurs personal risk.

  • rate this

    Comment number 229.

    Dear Stephanie, you present your 2 facts as:
    1. The figures might be revised up
    2. There might be growth next year,
    I suggest pigs might fly too? I suggest BBC replaces Stephanie with JOhn of Hendon, that is if he does not get Gideons job soon

  • rate this

    Comment number 228.

    I strongly suspect that Carney has not been told the truth about the UK banking system and its banks.

    He seems to be under the misapprehension that it is possible to solve the too-big-to-fail problem without collapsing the whole system - because the banks are bust and are all zombies.

    It he tries to fit the problem he will kill the banking system (or it would have already been fixed!)

  • rate this

    Comment number 227.


    Of course - but the BBC decided in its wisdom (NOT!) to limit everyone to 400 characters, unlike the vast majority of serious publications and media outlets.

    I warned them of the consequence of the twitterisation of discussions - abuse, trivialisation, half-truths as a substitute for wisdom and reason etc etc and even the eventual rise of extremism.

    But they made their choice!


Comments 5 of 231



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