The UK economy is stalling, but not in recession
- 25 January 2012
The official first guess that GDP declined by 0.2% in the fourth quarter is within the margin of error of a flat economy. There may have been a small depressing effect on the number from a combination of mild weather, the public sector strike and one fewer working day in the quarter compared with the prior four years. (Mean temperatures in October, November and December were above long-term averages, contributing to lower electricity and gas consumption.)
GDP is estimated to have risen by only 0.9% in 2011 but there was a big drag effect from the North Sea – the onshore economy grew by 1.4%.
Business surveys and labour market indicators suggest marginally firmer activity as the quarter ended. The hope is that the economy will benefit from global lift and an abatement of the inflation squeeze on consumers and businesses as 2012 progresses. Inflation, however, may fall by less than the Bank and consensus expect – see my post last week – while monetary trends have yet to show significant improvement (December numbers are released next week).
More on Mindful Money
Sign up for our free email newsletter here, for your chance to win an Amazon Kindle 3G Wifi.
- The UK economy combines both house price inflation and goods price disinflationary pressure
- With the strong UK employment market is it time for Forward Guidance mark three?
- Why is Janet Yellen talking the US Dollar down?
- The Bank of England finds that its own Quantitative Easing worked superbly!
- Are the oil majors having to come to terms with the dawning of solar power and what should investors do?
- Challenger banks Shawbrook and Close Brothers launch market leading fixed-rate bonds
- Are you an Expat with investment property in the UK? - You could be liable for UK Capital Gains Tax
- Where to find an inflation beating savings account
- Budget pension revolution: Just 5% of pension investors planning to blow all the money and rely on state pension
- Cost of living eases as inflation drops to 1.6% in March - its lowest level since October 2009