recession

Keith Fray

The UK economy has finally recovered. Today’s estimate by the Office for National Statistics of gross domestic product for the second quarter takes output (adjusted for inflation) to a new high, above the level of the first quarter of 2008*.

Hurrah. But, although welcome, this is nothing to celebrate. The government will not be ordering church bells to be rung. That the sum total of everything produced in the economy is only now returning to the levels of six years ago is astonishing. To give some context, the recession and recovery have lasted about nine months longer than the second world war. Read more

Chris Giles

There is a chart regarding the UK economy which has become so ubiquitous it is known in our office simply as “the Niesr chart”, because it is often republished by the National Institute of Economic and Social Research. It is supposed to be a clear and concise account of Britain’s recent economic woes, putting the recession into accurate context of past recessions. It shows the current recession as the longest and nearly the deepest since the start of the 1930s. People don’t generally know that in the UK the 1920s recession was much worse, but I’ll leave that for now.

Here is the latest version of “the Niesr chart”, published today. Take a good look at it before I tell you why I have begun to become irritated by it.

It is arresting because it does most things right. It is simple to understand. It is clearly drawn and obviously in context. The problem is that that the Niesr chart might be showing us irrelevant nonsense. It is also not a sufficient description of the UK’s recession.

 Read more

Valentina Romei

With the focus on today’s UK GDP numbers showing the UK is technically back in recession after the economy shrunk 0.2 percent in the first quarter, it is worth remembering another important aspect of GDP – levels.

The most recent IMF World Economic Outlook shows clearly that three of the G7 economies Japan, the UK and – more drastically – Italy have never managed to go back to pre-crisis levels of GDP.

GDP growth rebased

GDP growth (rebased) Source: IMF

Why does this matter? Well it isn’t until pre-crisis levels of GDP are reached it can be meaningfully said economies have returned to some sort of normality (my colleague Keith Fray has written more about thisRead more