: Clearly, the UK economy is bumping painfully along the bottom and can you predict with reasonable certainty that it is set to do so for at least the next decade. Welcome to the stagnation years. But only a fool, or Tory chancellor, could have failed to see this coming. It was inevitable that implementing massive cuts during a period of increased unemployment and a general downturn in world trade would have such a result. The UK’s overall output was 4.3% lower in the first quarter of 2012 than it was in the first quarter of 2008, just before the recession started.
As a further sign of the times, the pound hit a two-year high against the euro - at one stage it bought more than €1.23 on the foreign exchanges. Yet the rise in sterling was not a vote of confidence in the UK economy, but rather a collective vote of no confidence in the euro zone. Cheaper foreign holidays, yes, but more expensive UK exports to Europe. The pound was also stronger too against the US dollar, thanks to last week’s weaker than expected US growth figures for the first three months of 2012 - that had slowed to an annualised pace of 2.2% in the first quarter of the year from 3% in the final three months of last year. Less, anyway, than the minimum of 2.5% growth that had been widely hoped for.
Confronted by such dispiriting economic data and trends, and absolutely no rational reason to think it will suddenly be thrown into reverse, we might get to enjoy in the relatively near future the phenomenon of a triple-dip recession. Maybe it is time to blow the dust off those texts books on economic history.