Tuesday, January 26, 2010

UK "Out of Recession"

The BBC has the story here - pre-announced as usual, but this quarter they got it right - by the smallest possible margin, 0.1% of GDP.

The article notes that this is weaker than estimates, is based on only 40% of the figures, and that the figures for every other quarter since 2007 have been significantly revised later - the previous figures changed by 0.2% of GDP from the initial release.

More to the point, the deficit is something like 130x greater than the margin of 'recovery': if the government weren't borrowing, and spending, £178bn/year then we would be much deeper in recession. In real terms, we still are, since this artificial "growth" is paid for by debt which will have to be repaid at some point.

Still, following Laura Kuenssberg's observation on the cabinet going in to Number 10 yesterday, this could well be the news that sends Gordon Brown to the Palace... if the figures are later revised down to 0.0% or negative, he's lost the "recovery" message to hammer the Tories with.

I don't know - and I'm not convinced it's worth worrying about the election date. The Tories have (some) policies and Labour are clapped out and engaging in nothing but bitter points-scoring. Whenever it happens, the outcome is likely to be the same...

- KoW

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