Friday 26 February 2010

The Ghost of revisions past

Given I am moving house today, this post has been pre-prepared; very unlike me to do any such planning. However this morning the ONS revisions of the UK GDP Q4 2009 will be announced. I have been reading that the insiders in the City reckon it will be revised up to 0.2 growth. The less optimisitic think it will be revised down to 0% growth (as our the Lord Chancellor is fond of saying).

My hunch is for the downside as retial sales were very poor and although manufacturing was stronger it does not look good for the economy.

However, before I get side-tracked into the minutiae, the overall point is that this is a class A disaster fot eh UK public finances. The overall fall of UK GDP will still be something like 6% - even Mervyn King has admitted this in the House of Commons. Also this result is far worse than Alistair Darling predicted in the last budget, he was told by Balls and Brown that growth would be strong at the end of 2009 and through 2010.

Turns out of course that it wil be nothing of the sort. So now the deficit will be even worse than the cataclysmic predicitions that were made in April 2009. Oh dear, not a good day for the UK.

UPDATE: Revised up to 0.3% horray for the UK - still pretty poor though considering all the money poured in to try and kick-start the economy! (back to moving for me)


Old BE said...

If the number is revised upwards, the government and BBC will be crowing about how the numbers are even better than we thought!

Marchamont Needham said...

up 0.3 - they wouldn't dare rig the figures would they?

Weekend Yachtsman said...

There wouldn't be an election coming up, would there?

Nick Drew said...

some say if the 4Q numbers are better they will call the GE, for fear 1Q will reveal there is no recovery at all

actually NuLab is in a slight dilemma as they have parlayed the shaky numbers into a reason for not voting Tory ... so the rhetoric would be

it's real but it's fragile, vote Labour (while we still let you)

we know where you live

seriously, we do

(c) Mandy Fondlebum 2010

Budgie said...

CU said: "The overall fall of UK GDP will still be something like 6% ... ".

Assuming Brown's debt totals £1.5 trillion (some say more, some less) and then we start paying it back. At 5% interest we would need to pay back £200 billion every year for 20 years. Or twice as bad as the recession for 10 times longer.

I have given up on Brown returning from planet Zog, but no major politician seems willing to face this, either.

Sebastian Weetabix said...

I just don't believe the 0.3% number. I know it is folly to extrapolate from the particular to the general, but in our little materials business (which supplies into just about every part of the economy from automotive through to satellite manufacturing & everything in between) we didn't see any improvement between Q3 & Q4 last year. Flat, flat, flat. Which in itself is progress I suppose. Happily we have kept ourselves above water without many redundancies. Several people left through natural wastage mind - who we didn't replace - and quite a few went on a sabbatical (especially the kids who fancied a mini gap year and went off to Goa to smoke dope or munch on disco biscuits) or took up part time working.

Our problem right now is payment terms. As a rule our customers are on net 30 days but they are taking liberties - especially the bigger companies (f***ing around with their own net working capital figures, no doubt). The good news is that when you supply materials they need for production, you can threaten them with a line stop, which costs really serious money. The highlight of my day is a phone call from an anxious manager saying "where's my material???" - the absolute glee I feel as I say "where is our payment? Send us the money or the shipment get it!" is up there with sexual intercourse, let me tell you.

Hairy Arsed Bloke said...

I've had a quick look at the stats:

The 'growth' has been down to services. Drilling down further we find that it is comprised of 0.2 from distribution, hotels, and catering; and 0.1 from business services and finance.

So what these figures show is that the UK has gotten itself out of recession by going down the pub over the xmas period and shoving it on the plastic.

As the Septics would say, "Way to go UK"

Demetrius said...

Um, the revised figure of 0.3% is less than the increase in population. We are all worse off in that case. It is also a lot less than the increase in overall liabilities, so we are are faced with bigger bills in the future.

measured said...

I am with you on that @Demetrius, you wise of bird. Some consolation is that next quarter's figures, to be released at the end of April, may now not look so good quarter on quarter and that may not play into Labour's hands.

I hope the move has gone well, CU and you are sleeping in a proper bed tonight in your own bigger Englishman's castle.

James Higham said...

Shifting house again?