Madsen Pirie

Many City analysts think it might happen.  Roger Bootle thinks that the fourth quarter result for 2012 will show a contraction and quotes some contrasting figures.

UK GDP is still about 3pc down from where it was at the beginning of 2008. The US and Germany are up by 3pc and 2pc respectively. Incredibly, the equivalent figure for emerging Asia is up by 33pc, while China on its own is up by just short of 50pc.

Ernst and Young’s Item Club describe the Chancellor’s policy as “muddling through” and call for more innovative pro-growth measures.  The ASI takes the same line: that ‘Plan A’ is fine as far as it goes to restore fiscal integrity, but needs a corollary of measures to make business easier, especially for small and start-up firms.

There is a case for saying that what the UK really experienced was not a double-dip recession, but two separate recessions. The first was down to the banking crisis, and the second to the Eurozone sovereign debt crisis which followed later.  While the pound sterling was recently regarded as a ‘safe haven’ currency, 2013 has already seen it dip more than 2 percent against the dollar and 3 percent against the euro, as Richard Blackden points out. This could help UK exports, and maybe avoid those two negative quarters that would count as another recession.  Will the another dip come?  Odds seem to favour slow, steady but unexciting recovery unless government acts to boost growth.

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