Do you remember all those who confidently said that we'd have a U shaped recession and that the recovery from Covid would be an immediate bounce bank?
This is from the ONS this morning:
That does not look very U shaped to me. More like a stuttering.
Expect more of the same. The reality is that this is far from over, but only Joe Biden seems to realise that.
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My biggest issue is not that national GDP won’t bounce back. (Very likely it will, provided a variant doesn’t emerge that bypasses the vaccines). The problem is that a GDP recovery will not help those who have lost jobs, become overloaded with debt or had small businesses ruined. This recession has been even more divisive than the last. The well off have increased their savings and seen rents, house prices and investments all go up. Meanwhile the poorest have lost what little they had to start with and taken on debt they can’t repay. Simply looking at GDP as an average will not reveal the injustice of this recovery.
I’ve been reading Philip Mirowski (Richard let me tell you this – you are a much better writer than him! God – he’s verbose – anyhow) and it seems to me that this sort of bullshit can only ever be stopped when we have a good clear out one day of the economics profession in our Universities and bring this rubbish to heal in other ways too.
Economist are (1) seen as essential and (2) their utility is based on a lot of shoddy (Neo-liberal) theory.
On R4 I keep hearing about households stored savings that will lead to a boost in spending and a ‘high street’ renaissance . This is portrayed as a given. I mean it’s stupid isn’t it? I’m holding back money for example in case I lose my job. I’m damn sure others are too.
‘The wisdom of crowds’? Spare me. It’s mass delusion.
Agreed
But I have not read Mirowski so I will take your word on him
Stephanie Kelton’s “Deficit Myth” is coming out in paperback in May.
Just thought it worth a plug.
Why are you using old data? The latest release shows GDP grew 0.4% in Feb, and Jan was revised to -2.2%.
This is all during lockdown as well so the data is nowhere near as bad as it was expected to be.
https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/february2021
Go look at the graph for Feb
Same pattern
If anything, it looks worse….
Fairly grim data…. but now subtract the additional spending that Government has delivered due to COVID – that is (say) 10% of GDP. THAT tells you that the private sector is still flat on its back.
You also show the correct (most informative) chart – absolute level of GDP (not the change) – we should not be bamboozled into thinking 5% increase in GDP later this year is “good”. We can only say that we have recovered when we make a new high in GDP. It took over 5 years to recover from 2008 (longer if we look at GDP per capita) – how long this time?
Agreed re private sectoir
But how dare you suggest that the government might add value?
As it is, its added value is largely ignored because it is always assumed to deliver value at cost…
It’s possibly too early to say because we haven’t started the recovery phase yet. I’m loathe to make predictions. I’ve long thought that the house prices were excessively high, even before we were hit by the virus, and that we were overdue a correction. I was sure that the bubble would have been burst by the virus by now, but so far my predictions been confounded by ever rising prices!
So, will the housing bubble ever deflate and take the economy down with it? I still think it will, at some point, but my forecasting credibility doesn’t look too good at the moment!
We all have those moments
It won’t be at all U-shaped if any of the variants get out of control. https://www.bbc.co.uk/news/uk-england-london-56729607
So, one person coming home from South Africa to south London, who apparently did self-isolate on return and was tested when they showed symptoms, managed to spread the South African B.1.351 variant to their close family, and then a care home, and two schools. At least 44, perhaps 74, perhaps more, cases, so far. Including six care home residents who had one AZ shot, and one member of staff with one Pfizer shot, all vaccinated weeks before.
Also https://abcnews.go.com/Health/rare-instances-south-africa-variant-evade-pfizer-vaccine/story?id=77020482
And then there is the Brazilian P1 variant spreading in Canada. https://www.theguardian.com/world/2021/apr/11/canada-ski-resort-p1-covid-variant-whistler
Surely this government could not make the same mistake is locking down too late for the fourth time, could it?
Even so, I’m now old enough to have booked to receive my first shot shortly. Please do and get vaccinated, everyone. Along with staying at home as much as possible, and continuing with social distancing, and masks, it is the best we can do.