Very few observers are surprised by the way in which the rules pertinent to going into recession do not apply when emerging from it.
If we cast our minds back to 2008, we will remember (with Google’s ever-present help) that Britain was probably going to avoid recession. Later that year, we were assured on a daily basis that the recession would be short and shallow.
As evidence of a total slump piled up, Clerical Ally made a big deal about how it took two consecutive quarters of disaster to make an official recession.
Then – once in this recession that wasn’t going to happen – it was emphatically not a depression. We’d be out of it by late 2009, the Treasury vowed.
Here and now in the first quarter of 2010, we’ve had one quarter of growth at the level of 0.1%. Some three quarters of this ‘growth’ was achieved in (a) the public sector and (b) as a result of our tax monies being hurled at selling cars and reducing the rate of VAT. Everything else went backwards.
But the media insist ‘the recession is over’.
Thank goodness the average Brit knows better. If, after the next quarter, growth is still there – and most of it is in the private sector – then I will be happy to declare the ‘recovery’ real…albeit fragile.
But this isn’t going to happen: most observers were expecting a growth rate of at least 0.3%. The City has now wised up to the fact that we are the last and slowest to emerge from the aftermath of boom…and the bust has been bigger because (i) over nine million people are dependent on the State, rather than being productive; and (ii) our manufacturing infrastructure is pathetically weak.
One final note: these figures based on one quarter have been qualified by the NSO as ‘preliminary and subject to revision’. Nobody is expecting them to get better. April is going to be one helluva month. Brown will be in front of Chilcot,and the second-quarter economic figures will come out.
So then – no pressure.