Tuesday 25 January 2011

UK GDP shock; -0.5% contraction

Sadly this is pretty bad news for the UK economy. There was a very bad piece of wheather but that does not really explain over a 1% move in GDP over three months. On the plus side there was a big hit from reduced Government spending and a big gain of over 1.4% for Manufacturing. As the economy rebalances perhaps we will see more of this.
One thing is for certain, there won't be any imminent interest rate rises now, as predicted here last week - albeit for different reasons.

PS The pic is that one the ONS website - shame they have not been able to update their own charts, eh?


taxloss said...

Think you might need to refresh your browser cache! Chart is fine from here...

Bill Quango MP said...

The bad weather does count for much CU. Retail December sales roughly = Jan/Feb totals combined. Losing December, peak two weeks Xmas is like losing all of 2011 up to Valentines.
More worrying, is the January post Christmas slump is even more slumpy than usual. So will have to revise interest rates forecast as you say.

Tim Worstall said...

Tsk, there will be dancing in the streets over this!

LArry Elliott, Caroline Lucas, Murphy, Ed Balls, Ed Millipede....joy unconstrained!

After all, they've been telling us for ages that we have to shrink finance and boost manufacturing, haven't they?

And what's happened? Manufacturing has grown and finance shrunk.

They will be consistent, won't they?

Old BE said...

The aftermath of easy money will take time to work its way through.

I work in a countercyclical industry (or at least we get loads of new *enquiries* when the chips are down elsewhere) and things have picked up slightly recently, but nowhere near as bad as two years ago.

As I have posted before to much derision, this is all part of the unwinding of an unsustainable standard of living. Rates to stay low, steady but not outrageous stagflation for a couple more years at least.

James Higham said...

Rearranging the deckchairs.

Jeremy Hartley said...

You do know that the this is all a ploy to abolish money and have us all chipped with the all seeing eye?

Budgie said...

Jeremy - impossible, the Lizards get too much fun out of debasing our savings.