Out of Recession?

IP · #1 26-01-2010, 09:40 AM

While the headline grabbing focus may be that the UK has scrimped out of recession, there are many reasons to not to get too excited about the figures.

Growth of 0.1% is far from the kind of figure we need to be seeing to turn the economy around. Because the Office of National Statistics (ONS) only rounds to one decimal place, the figure may mis-represent almost double a 0.05% growth.

The ONS is also able to manipulate the figures by selecting who they ask to provide figures at any given time and must certainly have been under some political pressure to come up with something 'rosy' as we are the last country of the G20 to not have come out of recession.

Furthermore, 0.1% growth is still far below inflation, which would suggest in my book that the true figure still remains widely negative. And not forgetting that this is all against a back drop of Government spending incentives, many of which have or will stop in the not too distant future.

With the general inaccuracy of ONS figures, and such a tiny preliminary estimate of growth in the economy, I feel it is far to premature to take these figures as showing we are officially out of recession and there are many reasons to suspect (the weather, increased VAT etc) that the next quarter will provide far worse figures of a deeper, more prolonged recession than the UK has ever experienced in prior history.

Maslins · #2 26-01-2010, 10:08 AM

Agree with you entirely...but hey ho, nowt little old me can do, except continue to pinch clients from more expensive high street accountants!

Bailey · #3 26-01-2010, 02:05 PM

Does anybody else here see a smattering of manipulation of the stats?

Also is it a pure fluke that this breakout of good news is timed nicely at the beginning of the election run up

SCEPTICAL.................................me

Surely not!

seanstevens · #4 26-01-2010, 09:26 PM

more companies will go out of business in the next 11 months that the previous 12 so although we may officially be coming out of a recession, there isn't going to be much good news about for a while (well apart Brown departing soon).

IP · #5 26-01-2010, 09:48 PM

Quote:

Originally Posted by seanstevens

more companies will go out of business in the next 11 months that the previous 12 so although we may officially be coming out of a recession, there isn't going to be much good news about for a while (well apart Brown departing soon).

It is sadly true. While as the recession hit, it was the weak and over financed that could not cope. The next 11? I suspect 18 months that will really sort out the men from the boys.

Businesses with a strong capital base and a strong customer base will survive if they put the work in, but what we will see now is the failure of otherwise good companies.

If you are in the position to buy, now is the time to do so.

AdeTheBizCoach · #6 27-01-2010, 09:03 AM

On a slightly different note, I think now is the time to jump on a mortgage deal as the lenders are gradually increasing their SVRs. Fixed rates are good for those that want a bit of security for the next couple of years.

Interlinkdirectory · #7 10-02-2010, 10:41 AM

I think the general underpinnings of the economy remain weak and given the recent growth figures of 0.01%, the notion of being out of recession is thin at best.

There has been far too much emphasis on the financial sector combined with a foolish deregulation in our banking system over recent years. Sadly no one in government or opposition seems able or brave enough to grab this bull by the horns. Bankers are far too close to those in power.

I suspect the real resilience and innovation to drive a recovery will ultimately have to spring from the base. That is it will come from the many many skilled people who have been laid off. As these people start businesses, growth will come, but it will obviously be slow and at times anaemic. That is probably why this doesn’t look and feel like a recovery. It’s the sheer depth of this recession that has yet to be fully realised, that is even harder to do when viewed through the smoke screens that are thrown up by modern government.

One thing on our side is country which has a long history of reshaping and remodelling to new circumstances.

Out of Recession?

The Economy & Politics