NIESR: Double Dip Averted

HAMISH_MCTAVISH

The British economy avoided a double-dip recession and grew by 0.4pc in the first quarter, the National Institute of Economic and Social Research (Niesr) has estimated.

The think tank said growth was held back by a dip in output in January, after heavy snowfall disrupted activity, and was achieved despite the rise in the VAT rate at the beginning of the year. As such, it said "the underlying rate of growth of the economy is probably greater than 0.4pc."

However, it said the economic growth rate was still below the trend rate of growth, with output 5.4pc lower than it was in early 2008. According to Niesr's definition, the economy remains in depression, with output below its previous peak.

"Unless output turns down again, the recession is over, while the period of depression is likely to continue for some time. We do not expect output to pass its peak in early 2008 until 2012," it said.

The official estimate of first quarter gross domestic product will be published on April 23 by the Office for National Statistics. Economists widely agree that it is likely to report growth in the region of 0.5pc, a view reinforced yesterday by ONS data which showed manufacturing output grew by 1.3pc in February, more sharply than economists had expected.

It came as the Bank of England's Monetary Policy Committee (MPC) held interest rates at 0.5pc at its last meeting before the election, and voted to maintain its stock of asset purchases under quantitative easing at £200bn.

UK interest rates have now been at the historically low level for over a year, and the Ernst & Young ITEM Club predicted the MPC would not start raising rates until early 2011.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7569046/UK-economy-avoided-a-double-dip-recession-says-think-tank-Niesr.html

Yes, output remains depressed compared to it's peak and won't return there until 2012, but all-in-all the recovery is doing better than anyone thought likely a year ago, or even a few months ago.

:beer:

purch

NIESR: Double Dip Averted

.........for now !!!

Graham_Devon

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7569046/UK-economy-avoided-a-double-dip-recession-says-think-tank-Niesr.html

Yes, output remains depressed compared to it's peak and won't return there until 2012, but all-in-all the recovery is doing better than anyone thought likely a year ago, or even a few months ago.

:beer:

Not quite true. Remember everyone thinking we were going to come out of recession earlier than we did? We then got told we were still in recession though pretty much all of Europe was out?

Really2

Graham_Devon wrote: »

Not quite true. Remember everyone thinking we were going to come out of recession earlier than we did? We then got told we were still in recession though pretty much all of Europe was out?

TBF 0.4% is a big margin in reality. Also remember the last time first release was 0.1% ended up at 0.4%.

Also did they not revise them so we actually entered recession 1 or 2 quarters earlier than first thought about 6-12 months after?. They could not possibly do the same to reveal that we did exit earlier could they.

Habit seems to be revising them up at the moment. (I remember a IM post saying some of the city are fed up with the prelim as it is usually being under cooked)

nearlynew

Or it could just be a load of bullsh1t.

Really2

nearlynew wrote: »

Or it could just be a load of buulsh1t.

Is that a French cow?

HAMISH_MCTAVISH

Really2 wrote: »

Is that a French cow?

:rotfl:

..............

Rochdale_Pioneers

Graham_Devon wrote: »

Not quite true. Remember everyone thinking we were going to come out of recession earlier than we did? We then got told we were still in recession though pretty much all of Europe was out?

And then we realised that what we got told and the facts disagreed. We stayed in recession in Q3 whilst the Eurozone came out. I remember saying at the time hat its a funny performance when you consider how much lower unemployment was in recession-mired Britain compared to growth Euroland.

Then Q4. How the frothers mocked when we grew by just 0.1% in Q4. Out of recession later than Europe and growing slower? Nope. Europe now flat, and Britain +0.4%. So now we have the trend. Britain actually growing with high manufacturing output and relatively low unemployment. And Europe sliding backwards, with the likes of Germany already back to flat and Italy declining again, all with higher unemployment.

How has Britain managed to come out of this recession with stronger growth than Europe? Less unemployment than Europe? Lower government debt than Europe? Could it be that government handled the crisis correctly?

Emy1501

How has Britain managed to come out of this recession with stronger growth than Europe? Less unemployment than Europe? Lower government debt than Europe? Could it be that government handled the crisis correctly?

Because we are running a much higher budget deficit than the Eurozone as a whole.

As for the government handling the crisis correctly it will be years before this is known.

Jonbvn

Rochdale_Pioneers wrote: »

Could it be that government handled the crisis correctly?

No! It's called sterling devaluation, regardless of your electioneering. Thank god that nuliebor wasn't able to get us into that club.

FATBALLZ

To be honest, to me (and I'm no expert), I think Labour have done a reasonable job of responding to the immeadiate crisis. But we're at a position where we need to address the structural problems ie. vast out of control public spending and waste. Since Labour are in the pocket of public sector unions, this will never happen under their watch. Hence we need a change.