Uk 1q gdp drop largest quarterly decline since 1958

inspector_monkfish

Graham_Devon wrote: »

Re-read the thread.

It specifically states 3 months of slight growth, meaning a quarters growth of -1.8% would mean we are out of recession.

But were still negative overall, not positive.

Therefore, that makes my original post correct on this thread.

Anyway, gotta go work now. You guys can continue calling me stupid and wrong and a liar for reading stuff you lot have given as "correct". Have fun.

mate, whoever is right or wrong, it doesnt really matter - but you banging on and on about is just making yourself look like a t!t.

so just leave it, and move on please...

kennyboy66_2

Graham_Devon wrote: »

LOL.

Me dig any faster?

One minute your saying one thing, the next your saying another.

The thread is there, everyone can see it, including you agreeing we would be out of recession if there was growth of even 0.1% making the figures -1.8% over the quarter.

I know you bulls will all now collude together to make me look stupid. But the same people are on the other thread agreeing. Some even shocked.

You can't have it both ways. I realise I'm a target to "make look stupid" as I will admit I don't know everything and get some things wrong by their definitions, but I haev also said many times I am learning. I was learning on that thread also, from yourself.

So, if you would care to tell me whether you were right on that thread or not, we can move forward, but you cannot be right both ways.

Graham, I am not trying to make you look daft and have it both ways, but you have befuddled yourself. If the recession looked like this;

Q3 2008 995 -0.50%
Q4 2008 976 -1.90%
Q1 2009 953 -2.40%
Q2 2009 945 -0.80%
Q3 2009 946 +0.01%

It would mean the recession ended in Q3. Thats just the way the definition of a recession goes. It would not take away from the fact that if you measured the economy over 1/2 a year or a full year, that the performance would be dire.

Likewise, we could have 16 further quarters of growth of 0.3% per quarter, by the end of which we would only be back to 1000 GDP which we started with.

Thus you could then say that at the end of 5 1/2 years the economy was no bigger than at the starting point.

I'm trying to help here, perhaps have a coffee and engage your brain before you post a follow up.

System

kennyboy66 wrote: »

Graham, I am not trying to make you look daft and have it both ways, but you have befuddled yourself. If the recession looked like this;

Q3 2008 995 -0.50%
Q4 2008 976 -1.90%
Q1 2009 953 -2.40%
Q2 2009 945 -0.80%
Q3 2009 946 +0.01%

It would mean the recession ended in Q3. Thats just the way the definition of a recession goes. It would not take away from the fact that if you measured the economy over 1/2 a year or a full year, that the performance would be dire.

Likewise, we could have 16 further quarters of growth of 0.3% per quarter, by the end of which we would only be back to 1000 GDP which we started with.

Thus you could then say that at the end of 5 1/2 years the economy was no bigger than at the starting point.

I'm trying to help here, perhaps have a coffee and engage your brain before you post a follow up.

Nice, it's like "The ladybird book of recessions".

Degenerate

Graham_Devon wrote: »

It specifically states 3 months of slight growth, meaning a quarters growth of -1.8% would mean we are out of recession.

How can 3 months of slight growth add up to a negative quarter?

purch

Word of warning folks

But, thanks for the warning anyway !!

In about 27 quarters, the next time GDP is reported as a positive number again I'll know what to look out for.

Wookster

From The Times Online:

The UK economy shrank by 2.4 per cent in the first quarter at the fastest rate in more than 50 years and far worse than expected, according to official figures today.

Revised figures from the Office for National Statistics (ONS) showed that, between January and March, the economy contracted by its fastest pace since 1958. The ONS revised down its initial estimate, showing a contraction of 1.9 per cent.

Analysts had predicted that the revised numbers would show a 2.1 per cent fall in GDP.

Today's shock data is in part due to a change in methodology in the way that the ONS calculates construction and services output, but will do nothing to boost Alistair Darling's hopes of a recovery by the end of the year.

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Construction output was revised down from -2.4 per cent to -6.9 per cent in the first quarter, but there was also a bigger than expected drop in output from the services sector, that accounts for more than two thirds of the economy, which was revised down from 1.2 per cent to 1.6 per cent.

Industrial output was revised up slightly to -5.1 per cent, from the initial estimate of -5.3 per cent.

Analysts said that the figures underlined the fragility of the economy, with some revising down their expectations for economic growth this year as a result.

"The downward revision to first quarter GDP growth clearly leaves an extremely weak platform for growth this year. The average GDP growth in 2009 now looks likely to be - 4 per cent or weaker rather than the -3.5 per cent we previously expected, " said Jonathan Loynes, chief European economist at Capital Economics.

The data also showed GDP fell in the second quarter of 2008, meaning the recession started earlier than was initially thought. The country has now been in recession for a full year.

Today's figures mark a huge setback for Mr Darling and the Treasury. They have acknowledged that the UK economy will shrink by 3.5 per cent this year but are predicting that Britain will return to growth, of around 1.25 per cent, next year and in subsequent periods.

In his April Budget, Mr Darling forecast a 1.6 per cent contraction in the UK economy during the first three months of the year.

Last week, the Organisation for Economic Co-operation and Development, a respected European think-tank, forecast that the UK economy would shrink by 4.3 per cent this year.

It said that there would be zero growth next year.

The OECD is also predicting that UK unemployment will top 3 million over the next 12 months, in a further blow to Mr Darling's optimism about a recovery.

The ONS said today that, year on year, GDP had fallen 4.9 per cent, the biggest drop on record. It had previously estimated a fall of 4.1 per cent.

The revised figures sent sterling down to around $1.6605 against the dollar, paring back the morning's previous gains.

Dam 2.4% is an enormous fall! I still think we're on for -5 for the 2009 calendar year.

Generali

michaels wrote: »

Assume 95% employment going in to the recession. A 5% drop in output and assume no change in productivity suggests that 5% of those employed will no longer be needed = a 4.75% increase in the number unemployed.

In reality productivity gains are likely to make this figure even larger.

Plus just because we are down 4.9% so far doesn't mean that's it.

That's too big an assumption even for an economist to make IMO. If GDP falls by 5% then what we need to look at is what are the components of the fall. Falls in labour intensive industries (eg services) will cause higher rises in unemployment than those in more productive areas of the economy (eg financial services and 'industry').

Also, changes in unemployment aren't the same thing as changes in employment. For example, a migrant from a country who has lost his job and has the right to come and go to and from the UK might decide to ride out the recession in their cheaper home country (their home country is likely to be cheaper unless they're from Scandinavia or Germany IME).

It is my belief that the hardest hit sectors so far have been industry and financial services so the fall in employment will be less than the fall in GDP. If people cut back hard on consumption (perfectly possible) than unemployment could rise much more quickly than seen hitherto.

GDP is just everything added together - it's consumption + investment + Government spending + exports - imports. If you want to understand what is happening to the economy as GDP falls you need to understand what is happening to each of those things.

Australia avoided being officially in recession despite the economy here being pretty bloody. The reason? Consumers have cut back spending so much on imported luxuries that the drop in imports is enough to more than offset the drop in the other components of GDP. In other words, things are so dreadful, GDP actually rose!

StevieJ

Generali wrote: »

It is my belief that the hardest hit sectors so far have been industry and financial services so the fall in employment will be less than the fall in GDP. If people cut back hard on consumption (perfectly possible) than unemployment could rise much more quickly than seen hitherto.
!

Good points, but a cut in consumption (due to increased savings and exchange rate) is more likely to result in a reduction in imports (i.e. a reduction in employment abroad) in addition with the more competitive exchange rate exports are likely to have held up better than if a weakening in Sterling had not ocurred.

amcluesent

England is rapidly becoming a banana republic without the bananas.

Anyone with fixed overheads, leveraged investments and debts is taking/will take the mother of all haircuts.

Cash in king (for now) but by Q1 2010 will have stagflation as global oil and food prices spiral upwards, while we have 3,000,000 on the dole.

I'd get ahead of the crowds and start gleaning in t'fields on t'slag-heap now.

Generali

StevieJ wrote: »

Good points, but a cut in consumption (due to increased savings and exchange rate) is more likely to result in a reduction in imports (i.e. a reduction in employment abroad) in addition with the more competitive exchange rate exports are likely to have held up better than if a weakening in Sterling had not ocurred.

Well the weakening exchange rate cuts 2 ways: it reduces the volume of imports but it increases the value per unit imported.

As to the rest? Well it used to be that imports fell fast as consumption fell as imports were most often of the nice cars/electronics/posh wine variety. These days? I don't know the breakdown but my guess is that a larger proportion of imports are of the £3 jeans from China via Tesco or £7,000 cars from Poland than once was the case. My guess is that will have an impact on how falling consumption (if it falls) hits imports or domestically produced stuff. In the food market for example, British producers seem to try to position themselves as being the 'posh' choice these days.

As ever, we'll see.