Tuesday 26 January 2010

UK GDP Q4 2009; 0.1%

Wow, that is a poor number. So much for Labour going to call an election on the back of the 'return' to growth.

And crocodile tears for the BBC having prepared for weeks on the Government's behalf a 'we are out of recesion day special.' (Love this headline, UK emerges from recession, repeat the BBC is not biased, the BBC is not biased....)

Worse to is to remember the comparison; with oct to Dec 2008  - the total financial meltdown and crisis. So we have as the UK only achieved a 0.1% better result than that. truly awful.

Even worse the cold spell of january will have knocked productivity so the Q1 growth this year may not be great either (although here the comparison is with a -2.0% result last year, surely we can beat that).

I have long said Quantitative easing will not end at £200 billion and this number confirms this approach. QE will continue until the election in some form, as the Government financing demands it in this time of fantasy budgeting.

By way of example, Government spending is going to fall this year from £670 billion to £650 billion - a sharp cut according to the Government. However, income is likely, at best, to be flat at £450 billion.

Final point, GDP measure includes public sector spending, in fact it is about half of the number in less difficult times. This suggests the private sector in the UK is deeply mired in recession still, with large shrinkage in each successive qaurter.


Guido Fawkes said...

Well I'm short gilts up to the eye balls so I would rather they started unwinding QE now as they promised when the recession was over.

Bill Quango MP said...

BBC having another grumpy day. Really laying into Osborne, demanding he lists all the cuts that the Tories will make to reduce the deficit to zero.

Never heard Darling have to explain even a tenth of what Ozzy was asked.

Not that its wrong to try and pin politicians down, just that its wrong to only try and pin SOME politicians down. Maybe the Dark Lord is behind it.Last week Newsnight really went for Ed Balls all week.

CityUnslicker said...

Guido - Due to the shock that ending QE will have on the ability to seel gilts to the market, it is going to be wound down very slowly.

Your call will still work though as the economy fails to recover and spending is the same the price will fall as the curve steepens.

We will have our gilts shock though, maybe in May or June at latest? Although the budget might induce it earlier.

roym said...

@BQ, what was his reply? im pretty sure that they'll get in, so i'd quite like to know where the axe will fall.

one thing thats confusing me. if govt spending is making up the shortfall, what are we getting for this spending?

CityUnslicker said...

@roym - main increase in Govt spending this past 2 quarters has been dole money. The real issue is the structural overpsend of £90 billion, equivalent to virtually the whole NHS of 1.2 million people. Cannot be afforded,big government job cust ahread. I still think the IMF will end up doing the job as our politicians bottle it.

We get not enough for this money.

Wilcot Chaffey said...

Spring will soon be upon us, so it’s already that time of year when the poor start arriving at the Hall, asking if they can help till the fields. It’s a most pernicious nuisance, seeing the woe begotten types come trudging up the driveway. I don’t know how they manage to get over the electrified fence and keep the guard dogs at bay, and My Man’s time is completely taken up with chasing them away. What I spend on shotgun shells during March and April has been known to fund small revolutions in certain Middle African states.

However, with Spring comes the renewed optimism that I might soon be called upon to stand for election in this great country of ours. It’s about time that we had a change in government. The current state of things reminds me of the great bard’s words in his Lear.

When usurers tell their gold i’ the field;
And bawds and whores do churches build:
Then shall the realm of Albion
Come to great confusion.

You might say that I’m an old fashioned Tory in that I’m not one to have bawds and whores building churches. In fact, if I had my way, not a penny of lottery month would go towards such schemes. Which is quite unlike the police of the current administration. If there’s anything that the lottery now funds which isn’t built by bawds and whores, then I really think we should be told. I’m pretty damn sure that neither bawds nor whores understand the first thing about civil engineering.

Which brings me neatly around to Tories.

I’ve been looking around at the types of people who have become Tories in recent years and I’m rather disappointed by the sort of chap we’ve been attracting. Oh, they’re Toryish in their principals of low taxation and pro-business, but where’s all the charisma of the old guard? Where are well rounded characters of Churchill and Wellington? Tories need not be men (or indeed women) whose definition of happiness begins and ends with a discussion on interest rates. They should be people who are living proof that being a Tory brings happiness because we are in touch with the life spirit.

Old BE said...

+++ STOP PRESS +++

UK recession over! Gordon Brown has turned things around as he promised he would! Choco ration to be increased!

+++ STOP PRESS +++

Funny how you have to read to the bottom of the BBC News report to discover that some people think the figures are appalling...

Sebastian Weetabix said...

The attitude of the Bolshevik Broadcasting Corporation is totally unsurprising. First, they think all public spending is "good", so any effort to stop that is inherently vicious in the original sense of the word... secondly, after 30 years of going after the Tories, they know what they are going to get after May 6. Being abolished is of course too much to hope for, but a massive slash in income combined with dismantling BBC enterprises/publishing/America/the interweb behemoth must be on the cards.

No one cheers when someone comes along & breaks their rice bowl.

AntiCitizenOne said...

1/ AlJaBeebya is extortion funded so of course "Government spending" is good for them...

2/ http://www.debtdeflation.com/blogs/2010/01/24/debtwatch-no-42-the-economic-case-against-bernanke/

CityUnslicker said...

Amne to all comments re BBC - They have been pathetic today.

Anonymous said...

If you think that the BBC are showing bias today you should take a look at this story in the Guardian penned by their Economics Editor, Larry Elliot (http://www.guardian.co.uk/business/2010/jan/25/uk-recession-recovery-lessons-learned).

After presenting a simple summary of the crisis to date, the recession is consigned to history with the comment:

It was bad, but not as bad as it might have been.

So, it's all over. Perhaps I should sell all of my gold and go long the FTSE - or maybe not.

Demetrius said...

File the figures under "Fiction".

Steven_L said...

OT Did anyone see this on Bloomberg?

"Venezuelan President Hugo Chavez is selling dollars from central bank reserves for the first time in six years in what Goldman Sachs Group Inc. and Barclays Plc say is a futile bid to shore up the bolivar in unregulated trading.

The central bank, under orders from Chavez to “burn the hands” of speculators ..."

Made me chuckle

CityUnslicker said...

John East - the difficulty with what has been done is that it is so political.

the depth of the great recession has been lessened by the huge increase in its length. We may not get any good (non-inflationary) growth for years, maybe even a decade.

As Labour know they are going to be out of power it is fine by them. Cameron won't be able to blamce Labour for more than a couple of years.

Anonymous said...

Guido Fawkes: "Well I'm short gilts up to the eye balls "

How, what instrument does that involve?

Just curious old chap.

Philipa said...

Crikey NuLab are even more crap than I thought.

Anonymous said...

I am with Philip on this - but don't worry too much as no one believes them nor the BBC anymore. Even I was shouting down the Beebs nonsense about the recession being over when it clearly aint.