The UK has successfully avoided a triple-dip recession, notching up (admittedly very weak) growth in the first quarter of 2013.
But could it also prove to be the case that the UK did not even suffer a double-dip recession?
A number of commentators believe that it is likely that the 2012 relapse into recession could be revised away.
This news could come as soon as the end of this month.
The recession that never was?
Revisions to estimates for economic growth in 2012 could see the erasure of last year’s double-dip recession, when ONS releases its latest GDP data on Wednesday 26 June 2013.
This reflects better than expected 2012 data for the construction sector.
“It is increasingly unclear whether there was even a ‘double-dip,’” says NIESR
A number of commentators believe that it is likely that the 2012 relapse into recession could be revised away:
- The British Chambers of Commerce (BCC) Director General John Longworth says: “We have constantly said that earlier fears of a triple-dip recession were misguided and risked damaging confidence unnecessarily. Upward revisions of official figures may even show there was no double dip recession.”
- Economist Geoffrey Dicks tweets that latest official GDP projections (set out in the Bank of England’s latest quarterly Inflation Report) give credence to this theory: “Bank’s backcast of GDP data above ONS, just about rules out double dip. GDP -0.1% in 11q4, flat in 12q1 then -0.3% in 12q2.”
- NIESR says: “Revisions to data mean that it is increasingly unclear whether there was even a ‘double-dip’. As we have noted many times before, obsessing about a couple of quarters of minute falls in output distracts us from the clear trend: that of a stagnating economy.”
Is ongoing flat growth the real story for the UK economy?
The ONS argues that a preoccupation with monthly revisions to quarterly GDP estimates risks distracting public attention from the real story of growth over recent years: that the economy has stagnated for a protracted period. It says:
Although there has been much talk of a ‘double dip’ recession, economic growth is most realistically described as being broadly flat, or at best rising very slowly, during the past two and a half years. The annual average growth rate since mid-2010 is only 0.5%, compared with annual growth of 3% a year in the decade before the 2008 recession.
- XpertHR economic commentary June 2013: No silver bullet XpertHR’s economic commentary for June 2013 reports on latest data and expected future trends in a number of key economic indicators of direct relevance to HR professionals and reward specialists, including pay awards and pay forecasts, inflation, economic growth and labour market trends. We also look ahead to this month’s Spending Review, which will sketch out the next wave of public spending cuts.