ROLL on Thursday, when we find out whether the economic rollercoaster is heading down for another plunge into recession, the third since 2008 hence the 'treble-dip'.
April 25 will see the first estimate of gross domestic product in the first quarter. We slipped back into recession in the fourth quarter of last year and, in a sort of two-window version of a fruit machine, you need only two shrinking quarters in a row to fulfill the technical definition of a recession.
Last week's poor retail sales underlined the extent to which the snow depressed economic activity earlier in the year, thus the odds are shortening on a negative number on Thursday. This would be the first treble-dip recession since the late Twenties and early Thirties.
Personally, I think we'll just about get away with it, as happened in the Seventies, when we escaped a treble dip by a whisker.
The economy went into a double-dip recession in the second and third quarters of 1975 before returning to growth. It went back into recession in the second quarter of 1976, which was doubtless followed by sighs of relief with a return to growth during the long, hot summer of the third quarter.
A marginal amount of growth is expected in Thursday's number, according to Howard Archer, economist at IHS Global Insight. But, he added: 'There is major uncertainty over the outlook given that March’s cold weather could have had a further dampening impact on economic activity after the snow in January took a toll.'
Indeed.
!) Down at the old Dog and Duck...
SHOULD the worst happen and Britain return to slump, Ministers will be excoriated, especially those at the Treasury. You can be sure that at some point or other the Government will fall back on the last line of defence, which is that 'ordinary people up and down the country' are not interested in arcane economic definitions and all they care about is whether they broadly think the Coalition is on the right lines economically.
'Down at The Dog and Duck,' they will say, 'no-one is talking about "two consecutive quarters of negative growth".'
Maybe. The only Dog and Duck I have ever frequented was in Soho, thus packed full of articulate drinkers who were very much interested in politics, economics and the rest.
Be that as it may, the argument holds water insofar as many people may indeed not be discussing the technical details of growth, debts, deficits etc, but I fear this cuts both ways in that this lack of interest in the nitty-gritty may lead them to believe matters are actually worse – thus the government more incompetent – than they really are.
One example; when I was 13 and14 in the mid-Seventies, there was a claim doing the rounds that ‘the Arabs’ – i.e. the oil-producing states – were owed 5p in every pound in the whole country. Even my form master at the time, a chap who was (a) sporty, (b) left-wing and (c) a very good teacher, passed this on to us, his pupils, without much by the way of comment.
Now I don’t have the figures and it is possible that the portion of the annual deficit owed to the oil-producers in the broadest sense (the governments of those countries plus banks, other institutions and private investors based there) was the equivalent of five per cent of GDP.
But that is a very different (and far less alarming) prospect, the deficit being merely one year’s borrowing and GDP being simply one year’s output. A far cry from every pound in the country having a minority foreign shareholder.
2) Legacy! (cont.)
MARGARET Hodge, chair of the Public Accounts Committee, was on the Today programme on Friday morning to discuss her committee’s thoughts on the legacy of the London Olympics. An aside to Radio Four’s listeners told at least one of them (me) something they did not already know, which is that the cost of converting the athletics stadium to football is to be borne by the taxpayer.
One may have thought football itself may foot the bill, given that it is flush and the taxpayer is not. But then, big sport has long had a fondness for public money – on both sides of the Atlantic.
On a trip to Washington in the pre-crash years, I learned from my breakfast-time newspaper perusal that the capital’s municipal government had taken it upon itself to poach a baseball team from Montreal and rebrand it as the Washington Nationals, giving the city its first baseball team since the early Seventies.
Curious features about the deal included the fact that (a) the mayor had been involved in the first place, (b) the financing was underwritten by the city’s taxpayers, (c) so was the refurbishment of the derelict Robert F. Kennedy Stadium to house the new team and (d) so also was to be the planned replacement of RFK with a new stadium.
One sports columnist defended this geyser of public cash on the basis that baseball was full of subsidy anyway. Everybody’s doing it, in other words.
Not exactly free enterprise, though, is it?
3) Addenbrooke's: small is beautiful
BY contrast, I was less bothered by another item on the same programme, that covering the controversial scheme at Addenbrooke’s Hospital in Cambridge under which wards can receive a £1,000 a week payment for discharging by 10am those patients who are fit to leave, thus freeing the bed for someone else.
The money will not go to individual nurses and so on, said the hospital chief, but to a ward fund for training and better patient care.
An understandably baffled John Humphrys asked whether this meant each individual ward were a sort of independent business, and the medical honcho said that, in one sense, they were.
All for it myself. The Britain that works is made up of fairly small units – the inns of court, the Oxbridge colleges, assorted Army depots and specialist outfits, our fire stations, village schools and smaller local authorities. The Britain that does not consists of vast ‘strategic’ organisations that in true Sir Humphrey style secure their budgets, premises, computers, pension arrangements, staffing levels and so forth and then quietly disclaim responsibility for anything.
Thanks again for reading and have a good weekend.
Feel free to e-mail me at dan.atkinson@live.co.uk
Going South: Why Britain Will Have A Third World Economy By 2014, by Larry Elliott and Dan Atkinson is published by Palgrave Macmillan
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