As UK Q2 GDP falls off a cliff, can will call it a depression yet?
Regular readers will not be surprised in the slightest by today’s news from the government funded Office for National Statistics that the UK’s GDP fell 0.7% in Q2 vs Q1 – that’s an annualized FALL of 2.8%.
From the report:
- The chained volume measure of GDP decreased by 0.7 per cent in Q2 2012 compared with Q1 2012
- Output of the production industries decreased by 1.3 per cent in Q2 2012 compared with Q1 2012, following a decrease of 0.5 per cent between Q4 2011 and Q1 2012
- Construction sector output decreased by 5.2 per cent in Q2 2012 compared with Q1 2012, following a decrease of 4.9 per cent between Q4 2011 and Q1 2012
- Output of the service industries decreased by 0.1 per cent in Q2 2012 compared with Q1 2012, following an increase of 0.2 per cent between Q4 2011 and Q1 2012
- GDP in volume terms decreased by 0.8 per cent in Q2 2012, when compared with Q2 2011
Let’s not forget that the ‘recession’ that started in Q2 of 2008 officially ended at the start of 2010. Now we have always maintained that the idea that the recession ‘ended’ at the end of 2009 is more economic wishful thinking and spin than actual hard fact – the stark reality is that the UK economy is still in the recession it entered in Q2 of 2008, and when the history books finally write up their coverage of this time it won’t be called a recession, but rather a depression.
Let’s look at some numbers:
Since 2008 Q2 (ie since the start of the recession that supposedly ended at the start of 2010), here are the quarter-on-quarter GDP figures for the UK:
2008 Q2: -0.9
2008 Q3: -1.8
2008 Q4: -2.1
2009 Q1: -1.5
2009 Q2: -0.2
2009 Q3: 0.4
2009 Q4: 0.4
2010 Q1: 0.6
2010 Q2: 0.7
2010 Q3: 0.6
2010 Q4: -0.4
2011 Q1: 0.5
2011 Q2: -0.1
2011 Q3: 0.6
2011 Q4: -0.4
2012 Q1: -0.3
2012 Q2: -0.7
That’s right, in total the economy has contracted 4.6% since that start of the previous recession.
Now let’s look at unemployment:
(click for sharper image)
And what about that debt? Here is what the debt was back at the end of 2009:
That’s right – the debt has increased a staggering 40% since the ‘end’ of the recession
And finally how does the recession that started in 08 compare to other recession, including The Great Depression?
In short this has been one big long depression that started in the middle of 2008 – we are now 4 years into this depression and there appears to be no end in sight. And most worryingly we enter this latest downturn in a much, MUCH worse fiscal shape than the downturn in 2008.
Expect the Bank of England to respond accordingly – Print. More. Money. After all, that is all they actually know how to do.
- UK CPI falls to 3.6% – still way above the government mandated target of 2%
- UK CPI falls to 4.2%: inflation in the UK is still more than 100% over target, more money printing now guaranteed
- As the CPI falls to 2.8% HSBC brings forward to July their forecast for more money printing by the Bank of England
- As the CPI falls for a third month the Bank of England has still produced 41% more price inflation than they should
- UK CPI falls to 3% – too low for the Bank of England, money printing to start within 3 months? The IMF certainly thinks so
Link to this article: : http://www.goldmadesimplenews.com/analysis/as-uk-q2-gdp-falls-off-a-cliff-can-will-call-it-a-depression-yet-7464/