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UK economy 'contracted in fourth quarter'
BertieUK
Posts: 1,701 Forumite
The news that we did not want to hear, but to be quite honest we expected it.
The UK economy contracted by 0.3% in the last three months of 2012, according to the National Institute of Economic and Social Research (NIESR).
The NIESR blamed it on artificially strong growth in the third quarter.
If the figure is confirmed by official data later this month, it will mean that the economy returned to growth for only a single quarter.
It would also mean the economy saw zero growth for the whole of 2012.
All tickets for the Olympics and Paralympics were considered in the official statistics to have been bought in the third quarter of 2012, when the games took place.
That flattered the economy, which registered growth of 0.9% in the three-month period.
It meant that without the one-off factor the economy would have had to find considerable growth from elsewhere to avoid a contraction in the final three months of the year.
The NIESR said that without the one-off factors the economy would have been basically flat for the third and fourth quarters.
The conclusion from the NIESR is supported by some gloomy official figures released earlier in the day.
The index of production grew 0.3% in November, compared with October, but had been expected to grow more as some North Sea oil and gas production resumed following maintenance.
Construction sector output contracted 3.4% in the month.
But both sectors are much smaller than the service sector, which posted 0.1% growth in October compared with September.
Official figures for the service sector for November have not yet been released, but the widely-watched Markit/CIPS purchasing managers' index showed the sector growing at its slowest pace for two years in the month.
http://www.bbc.co.uk/news/business-20987571
The UK economy contracted by 0.3% in the last three months of 2012, according to the National Institute of Economic and Social Research (NIESR).
The NIESR blamed it on artificially strong growth in the third quarter.
If the figure is confirmed by official data later this month, it will mean that the economy returned to growth for only a single quarter.
It would also mean the economy saw zero growth for the whole of 2012.
All tickets for the Olympics and Paralympics were considered in the official statistics to have been bought in the third quarter of 2012, when the games took place.
That flattered the economy, which registered growth of 0.9% in the three-month period.
It meant that without the one-off factor the economy would have had to find considerable growth from elsewhere to avoid a contraction in the final three months of the year.
The NIESR said that without the one-off factors the economy would have been basically flat for the third and fourth quarters.
The conclusion from the NIESR is supported by some gloomy official figures released earlier in the day.
The index of production grew 0.3% in November, compared with October, but had been expected to grow more as some North Sea oil and gas production resumed following maintenance.
Construction sector output contracted 3.4% in the month.
But both sectors are much smaller than the service sector, which posted 0.1% growth in October compared with September.
Official figures for the service sector for November have not yet been released, but the widely-watched Markit/CIPS purchasing managers' index showed the sector growing at its slowest pace for two years in the month.
http://www.bbc.co.uk/news/business-20987571
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Comments
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Very convenient that the NIESR weren't talking about artificially high growth between 2000 and 2007.
Very convenient indeed.0 -
You can just imagine a bunch of cheerleaders singing away right now
"GIVE US AN A"
A
"GIVE US AN ANOTHER A"
A
"AND WHAT HAVE YOU GOT"
AA, our new credit rating if things don't rapidly pick up0 -
homelessskilledworker wrote: »You can just imagine a bunch of cheerleaders singing away right now
"GIVE US AN A"
A
"GIVE US AN ANOTHER A"
A
"AND WHAT HAVE YOU GOT"
AA
And thats what our credit rating is going to be if things don't start picking up rapidly.
The credit rating is not about GDP +/-, it's about ability to service debts.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
It's been 0.1, then 0.2 and now.....0.3%0
-
GeorgeHowell wrote: »The credit rating is not about GDP +/-, it's about ability to service debts.
Which is the ONLY thing that is going to service our debts0 -
Graham_Devon wrote: »It's been 0.1, then 0.2 and now.....0.3%
Looking like it's going to be 0% +/- for the year.
Looks like our prediction of a quadruple dip is on!
The media should be able to scare the consumer much more effectively using words like triple and quadruple dip - flat would be so boring.0 -
homelessskilledworker wrote: »Which is the ONLY thing that is going to service our debts
No it isn't. There's huge scope to reduce public expenditure in areas of waste, ill-advised projects, unjustified welfare, overpaid public sector workers etc. Having the political bottle and the werewithal to deal with it is another matter.
Waiting for growth is like waiting for Godot.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
Looking like it's going to be 0% +/- for the year.
Looks like our prediction of a quadruple dip is on!
The media should be able to scare the consumer much more effectively using words like triple and quadruple dip - flat would be so boring.
It has not been a double dip, tripple dip, and it won't be a quadruple either or what ever a 5th ones called.
We had a huge dip in GDP post 2007 which market rigging and QE turned into what has been a dead flat continious market ever since, which would have been a depression otherwise.0 -
Unfortunately economic growth is important because it is what the government bases its budget on and hence why the deficit is nowhere near where they want it to be.
Basically they should have been more realistic from the beginning and realised that the spending and job cuts and tax rises would result in a weaker economy. It's common sense really.0 -
shortchanged wrote: »Unfortunately economic growth is important because it is what the government bases its budget on and hence why the deficit is nowhere near where they want it to be.
Basically they should have been more realistic from the beginning and realised that the spending and job cuts and tax rises would result in a weaker economy. It's common sense really.
Common sense is defined as..."sound and prudent judgment based on a simple perception of the situation or facts."[
Is it possible to always use common sense in politics?0
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