The longest recession on record

By Alex Smith / @alexsmith1982

Official data this morning showed that the recession is now the longest since records began in 1955, after GDP fell by 0.4% in the third quarter of this year – the sixth consequtive quarter of contraction.

Economists had previously forecast that the economy had grown 0.2% between July and September.

While the contractions are less severe than they have been for the past four months, there are worrying signs that some areas are suffering more now than they previously had been.

According to ONS statistics, mining and quarrying made the largest contribution to the decline, falling by 3.5%, compared with a fall of 0.6% in the previous quarter; distribution, hotels and restaurants fell by 1.0%, compared with a decrease of 0.4% in the previous quarter; and construction output decreased by 1.1 %, compared with a decrease of 0.8% in the previous quarter.

TUC General Secretary Brendan Barber said today’s figures showed that the economy remains “extremely fragile”:

“Even if we had achieved a technical recovery today, it would not feel like a recovery to the thousands losing their jobs or afraid that they will join the dole queue in the months ahead when unemployment will continue rising. It takes more than a statistical read out and the return of big bank bonuses for a real recovery”.

But in other sectors, there were at least signs that the conditions are improving. Business services and finance decreased by less than in the previous quarter, as did agriculture, forestry and fishing. Transport, storage and communication fell by 0.3%, compared with 1.8% in the last quarter.

In terms the electoral forecast and what this might mean for Labour’s chances at the next election, circumstances are clearly becoming increasingly hard. But the signs remain that the economy will be on its way to recovery by May. Government action has helped reduce the effects of this recession; it has not – as David Cameron likes to spout – been the cause of this turmoil. But – as the leadership has clearly realised – even eventual recovery may not make a difference, and there has to be a proper plan B.

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