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It’s odd to read headlines today saying that the UK has officially entered recession. We’ve known this for months: shops were closed, restaurants shuttered. You couldn’t get a cup of coffee or a haircut, offices were closed and millions furloughed. These were not normal times – but we knew that then, as we know it now. What we didn’t know was how far the economy had contracted, and how much this could be remedied by ending lockdown. The big news today, revealed by official figures released by the Office for National Statistics this morning, starts to answer this. It turns out that our economic hit was one of the hardest

This is an economic horror show. According to YouGov, UK unemployment may have jumped five per cent in a matter of weeks. The consultancy CEBR estimates that global GDP may shrink by twice the rate seen in the Great Recession. This may be the worst hit to British people’s livelihoods since the Great Depression of the 1930s. Except one thing is different: this is a deliberate economic shutdown, made necessary to avoid a deeper, more human one. It isn’t that the economy is failing to work because the credit system has seized up as in 2008. We are actively contracting productive work in order to limit a tragedy. A recession it will

The Bank of England hasn’t wasted time getting in front of the coronavirus, and its actions this morning show how far things have moved from the days of Mervyn King. Perhaps more interesting than the interest rate cut is the Bank’s moves to quickly free up the best part of £200bn of lending capacity for UK businesses, particularly small firms who are entirely reliant on banks for funding. The idea is to create a firebreak, to make sure economic malaise doesn’t lead to businesses failing through lack of working cash flow. Fewer restaurants and hotel customers, a fall in those travelling, and more people working from home will all put pressure on

The sense of excitement among some Remainers is almost palpable. Finally – after three years of waiting – a quarter of negative growth has materialised following all the grim warnings of Brexit-related economic turmoil. The Office of National Statistics (ONS) this morning released its first estimate for economic growth for the second quarter of this year, which has come out at minus 0.2 per cent. That counteracts unexpectedly strong growth in the first quarter of 0.5 per cent. Manufacturing, which shrank by 2.3 per cent, was the worst-performing sector of the economy. The dominant services sector expanded but only just, at 0.1 per cent. Another quarter of negative growth and

So, the Office of National Statistics has confirmed that the economy grew by 0.7 per cent in the last quarter of 2016, and by 1.8 per cent over the course of the year. Can we now please stop worrying about a post-Brexit recession and worry instead about an unsustainable consumer boom fed by interest rates which remain at panic levels. The bad news this morning is that the UK saving ratio – which is an estimate of the percentage of their income which households are saving – has fallen sharply from 5.3 per cent to 3.3 per cent. That takes it lower than it was a decade ago, just before

So now we know. The recession that we were told would be ‘inevitable’ if we voted to leave the EU was not quite so inevitable after all. In fact, it hasn’t happened at all. The Office of National Statistics’ first estimate of economic growth for the third quarter has the economy growing by 0.5 per cent. Though this is just an early estimate and could well be revised – revision upwards or downwards of 0.1 to 0.2 per cent are perfectly normal – it is certainly not indicating a recession, which would be two quarters of negative growth. It is pretty much in line with how the economy was growing

It’s now exactly one month until the EU referendum and the Treasury has marked the moment with another economic warning about the consequences of Brexit. The analysis out today claims that walking away from the European Union would kick-start a year-long recession. Brexit would also lower the country’s economic growth down by 3.6 per cent, according to the analysis. Although George Osborne must be nearing the point of running out of words to describe the economic ramifications of Brexit, in an article in the Daily Telegraph, Osborne and Cameron had this to say: ‘It is clear that there would be an immediate and profound shock to our economy. The analysis

Dear David, From Q2 1979 to Q1 1981, quarterly real GDP fell in the UK by 5.5%. Unemployment rose rapidly, from 1.4m in Q2 1979 to 2.4m by the end of the recession, then continued rising through to its peak of 3.3m in 1984 – 12% of the workforce. Unemployment stayed above 3m for 51 straight months. This is the pattern economists expect in a serious recession. Unemployment rises, then stays persistently high, falling back only well into the recovery. It has also been the experience of much of the developed world since the Great Recession of 2008/09. So, for example, whereas US unemployment was below 5% in 2007, it rose

The rest of Europe has, predictably, reacted negatively to the suggestion that the UK should be able to impose some kind of cap on free movement while remaining in the EU. At first glance, it does sound as if David Cameron wants the UK to stay a member of the European club without subscribing to one of its founding rules. But there’s actually a very good argument for why the UK should be treated differently. As I say in my column this week, Britain is the one major EU economy that is never going to join the euro. This makes Britain a special case. If there is no limit on

The Eurozone is now in recession – this, at least, is what is implied by today’s avalanche of dire economic data. Eurostat has not (yet) made this calculation; but Capital Economics has. Take into account the relative size of the Eurozone economies who have declared figures and it suggests a fall of 0.1 per cent for Q3 which, which, coming after the contraction of 0.2 per cent in Q2, would meet the test for recession (two consecutive quarters of negative growth). So, like Britain, a double-dip recession. Greece and Portugal are still in meltdown. The Germans are doing okay, with growth of 0.2 per cent for Q3. This is mainly

When City AM editor Allister Heath was leaving the BBC’s Westminster studios on Friday, the last thing he would have expected was to be ‘arrested’. Out popped an overexcited viewer of the Daily Politics who I hear accosted Heath declaring: ‘I’ve got a warrant for your arrest’. The white envelope was quickly discarded. but a frothing anti-city rant ensued. A BBC snout tells me that Heath returned upstairs and was later smuggled out of the building while a quick-thinking BBC staff member distracted the lunatic. The irony of it all being that Heath had just spent the last hour slamming the banks and generally turning on the City, but this

So who killed the recovery? Ed Balls points to a ‘recession made in Downing St,’ and has gone on a victory tour today. ‘I have consistently warned David Cameron and George Osborne for over a year that going too far and too fast on spending cuts would backfire,’ he says. ‘Arrogantly and complacently they ignored those warnings, and the country is paying a heavy price.’ Facts are always the remedy to an outbreak of Balls. The government releases monthly spending figures, which show an increase overall. That’s due to the rising cost of debt and dole, you might say, but strip those two out and you have what the ONS

Yet another day here in Westminster that’s all about the economy. Nick Clegg has just delivered a speech on the subject to Mansion House, focusing on ‘responsible capitalism’, which we’ll blog shortly. And two prominent forecasting groups, the Ernst & Young ITEM Club and the Centre for Economic and Business Research, have suggested that we’re effectively back in recession. They both reckon that the economy shrank in the final quarter of last year, and is wilting even further in this current quarter. But, like the OECD, they also predict that this ‘double dip’ will be relatively short-lived and relatively mild. Against that backdrop, enter George Osborne. The Chancellor spoke from

Did you realise that today is the first anniversary of the government’s Spending Review? Neither did I until the politicians started making a fuss about it, starting with Vince Cable on the TV last night. We’ll post video footage of the Business Secretary’s performance when we can, but this write-up here just about covers it. He made a few earcatching remarks — among them that “we didn’t know that there would be a major crisis in our export markets and that energy prices would shoot up” — but one has captured the headlines more than any other. Asked whether he could promise that we wouldn’t experience a double-dip recession, Cable