We must all be pleased and relieved that the economy actually grew by more in 4Q 2009 than suggested – up from 0.1 to 0.3%.
Except that it didn’t.
The Telegraph has a couple of reports …
“The size of the British economy – in other words the total amount of cash generated by its companies and spent by its people – was actually £133m smaller in the fourth quarter than the ONS previously thought.”
“Before today’s revisions, it thought the economy pumped out £315,845m worth of output in those three months. Now, it thinks the actual figure was more like £315,712m.”
“the ONS … went back through a whole range of its statistics, and discovered that the recession was in fact significantly deeper than it previously thought. So although in Q4 Britain ended up producing more or less the same amount of cash (actually £133m less …), it produced even less than was previously thought in the preceding quarters”
“The pound slid to new lows on Friday after it emerged that an apparent improvement in Britain’s growth late last year disguised the fact that the Office for National Statistics has actually cut its estimate of Britain’s economic output. ”
A four month low.
So despite all the headlines – “the official estimate of the level of economic output in the fourth quarter was actually £133m lower than the ONS’s previous estimate, at £315,712m. The ONS also revealed that the peak-to-trough fall in economic output was, at 6.2pc,”
For those who thrill to the words of bona fide economists …
“Andrew Lilico, chief economist at Policy Exchange, pointed out that the lower estimate of GDP would have far-reaching consequences for the public finances. He said: “A political consequence is that, since the economy will now be smaller at the start of the 2010/11 budget year, tax receipts should now be expected to be lower, so the 2010/11 and 2011/12 deficit projections will need to be revised up – perhaps to above £200bn – even if the deficit ends up fractionally down this year. That makes early spending cuts more urgent.” ”
Is this a scenario where you would call call a General Election? Hmm…
Just as well we have a Prime Minister with a brain the size of a planet.