While recently there has been much conflicting news about economic recovery, the Office for National Statistics has announced that our economy is at last growing again. But have we really kissed the recession goodbye?
Unpack the streamers and fetch back your folding table from the neighbours. If there’s ever some news deserving of a street party it’s this: the recession is over. Technically. Releasing its figures for the last quarter, the Office for National Statistics (ONS) has announced that the UK’s GDP grew by around 1% on the previous quarter. Which is good, surely?
Well, opinion is mixed. Focusing on the positives, agriculture and the services industries are displaying some rather healthy signs, showing 2.2% and 1.3% growth on the quarter. Additionally, while the construction sector is still contracting, it is doing so at its lowest rate since the final quarter of last year. What’s more, the power of our success at London 2012 means that faith in Brand Britain is still pretty high right now.
On the down side, there are some reasons to believe that this could be a statistical aberration. Claims have been laid that the Diamond Jubilee in the second quarter of this year inevitably drove figures down, with the extra days off impacting GDP. This would be further exacerbated by our Olympic success artificially inflating our figures this quarter, 13 potentially producing the statistical leap into positive growth. Additionally, some feel that the knock-on impact of austerity measures has only really just begun to be felt, meaning that it is still hard to draw any firm conclusions from the ONS data.
And so the million dollar question remains: is it time to stock up on party poppers and crack open the Veuve?
says Oliver Barber director of Kingsbridge & Carter Property Investment
The figures themselves are becoming more positive. We’re five years past the previous peak, which in previous large downturns has been the fulcrum. And, although the press has been full of Armageddon, it’s not materialised and people are bored with it. You can almost sense as you go about your business and talk to people that there’s a positivity just starting to come through that wasn’t there until very recently.
Clearly the employment numbers, industrial production numbers, stock market figures and total earnings have not just occurred because we were fantastic in the Olympics. I think the ONS has judged the Olympics added 0.2% to GDP in the quarter, which is good. It was a positive effect but it had far less of an impact than most people think.
There’s still a recessionary mindset in place but I think that actually helps the recovery. Looking back at previous recessions we go through a massive shock, then there’s sort of an acceptance that everything’s harder and that acceptance leads to a tougher mindset. People work harder – it’s the old Churchillian thing.
says Dr Rohan Weerasinghe author, international speaker, money and wealth educator
This is certainly not the end of the recession. It is simply a rather minor upward pump in a seriously downtrending global and European economy, which is likely to continue for another four to six years. There may have been some minor and positive adjustments, but at this point in time, with the international levels of quantitative easing, it is very much like pumping air into a dinghy that’s riddled with holes. For short periods the dinghy may rise a little but then it will continue to head down. Which is exactly what I believe we will see.
As the levels of credit and bank borrowing have spiralled out of control, it is only now that we are seeing the full impact. In simple terms, on a global level there is not enough money being earned to pay back the borrowing. At some point this has to implode. This recent upturn is, in my opinion, just a small bubble of buoyancy in a sinking ship.
This recession is not over. There may be a small upend, however, I genuinely believe it is merely a blip.