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
    +16

    Comment number 29.

    I hope Stephanie is right to be optimistic. The biggest bubble in history, the Bond market, is going to pop. Sterling will devalue. We then get rampant inflation. Then we get higher interest rates. Then housing market crashes, etc etc. I think we should of just defaulted in 2008 and jailed the bankers & politicians responsible. The big reset approaching is now going to be much bigger & painful.

  • rate this
    +16

    Comment number 27.

    Anyone posting on here have a 0.5% mortgage, loan, business loan, overdraft?

    Thought not

    I repeat, the only low interest rates are the BoE base lending and what you get for your savings.

  • rate this
    +14

    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
    +12

    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
    +9

    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!

 

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