Tuesday, 26 January 2010

UK economy out of recession (not!)

They're saying we're out of recession. Yes, our economy grew by +0.1% in the last quarter of 2009! Of course they were expecting it to grow by +0.4% so it's not time for total euphoria, but still growth is growth, isn't it?

Well, firstly, how much exactly is +0.1% of quarterly GDP? It's about £350 million. And over the same period the government pumped almost £50 billion of quantatively eased "printed" money into the economy. They also subsidised new car sales by £1,000 a pop and galvanised shoppers with the (then) impending VAT rise from 15% to 17.5% - now a done deal of course. Also there was Christmas. Sometimes that has been known to add a little to people's spending.

So the £350m "growth" is statistically insignificant and dwarfed by other factors in the economy. The government has its "good news" story of the day, but really this is nothing to be proud of.



小巨蛋 said...


Nationalist said...

I agree with the above sentiment. (And I leave it as an exercise for the reader to do the translation from the Chinese themself.)

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