No sooner had the Office for National Statistics (ONS) announced last Wednesday that the UK economy had fallen back into recession than economists starting lining up to denounce the figures as wrong. Having predicted that the economy would have expanded at a modest rate in the first quarter of 2012, they refused to believe the ONS has got it right when it said that real GDP contracted by 0.2 per cent, after a fall of 0.3 per cent in the final quarter of 2011.
However, this debate over whether the economy grew or shrank by 0.1 or 0.2 per cent in the most recent quarter should not distract from the bigger picture. When the coalition government was formed, the economy had grown by 2.5 per cent over the preceding year – not a strong recovery from recession, but at least a recognisable one. In the subsequent seven quarters, real GDP has increased by just 0.4 per cent according to the official data. Even if the ONS has got the latest quarter wrong and the true figure is a little higher, this is a pretty dismal performance.
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