Is Britain really out of recession?
For all the attention they drew, the UK GDP figures released this week were meaningless. As John Hawksworth of PricewaterhouseCoopers put it: “Given the normal margin of error for preliminary GDP estimates, the difference between 0.1% and zero growth is statistically insignificant”. Yet they’re being bandied around as final proof that Britain, after a 6% plunge in output, is now out of recession.
But even if it is, it might not be for long. London may be buzzing with bonuses but there’s little good going on elsewhere. We know, for example, that there’s a strong chance property prices will fall again later this year – it’s just a matter of waiting for a few more sellers to blink and a few more lenders to raise their rates.
We know unemployment is a huge problem. The statistics may say things are looking up, but every month the number of actual employed people falls. I had dinner this week with an entire table of unemployed people. None are in the statistics for the simple reason that they once had good jobs, and they have savings. If you aren’t eligible for benefits you won’t sign on, but you’ll still be unemployed and you’ll still be cutting your spending to fit your circumstances….
• Read the full editor’s letter here: Is Britain really out of recession?