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The UK growth collapse in full

August 8, 2012 11:05 am

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Today the Bank of England announced their revised growth forecast for 2012*.

Here’s how they have collapsed over the past twelve months:

* = The Bank of England persist in saying that growth will be “close to zero”. This is not a number, so we’ve used zero.

PeterBarnard

Why should anyone have any faith in any BoE growth forecast? Last year’s 2.0% : revised ; May’s 0.8% : now revised ; today’s “close to zero” : ?

The IMF forecasts are no better.
- TomFairfax
  
  Hi Peter. Not much of a forecast, when we’re more than half way through the year.
  
  More like reporting reality.
  - PeterBarnard
    
    That passed me by (1/2 way through the year), TF.
    
    I guess that it will improve their chances of getting it somewhere in the ball park.
    
    I don’t know whether you are aware of J K Galbraith’s observation (I’ve mentioned it before) that “the only function of economic forecasting is to make astrology look respectable.”
    - TomFairfax
      
      Yes, I think I did see you add that quote from JKG to a comment a while ago. Some of his books seem littered with candidate phrases just begging to be used.
      
      On the bright side, seeing how we had a contraction of 0.3% followed by one of 0.7% and deepening gloom on the economic front since, the BoE sees growth of just over 1% for the next half a year to get us back up to zero.
      
      I think Mystic Meg might not have assumed just under normal trend growth of greater than 0.5% for the next two quarters without any obvious reasons being mentioned, such as Mars being in alignment with the London Shard whilst G. Osborne sits on a ducking stool, at 2.30am, wearing one sock and a tea cosy.
      - PeterBarnard
        
        Indeed, TF (and a laugh after reading your last paragraph … poor George … a lad in a man’s job).
        The ingredient that is missing in the UK economy is confidence, both by consumers/householders (expenditure component of GDP) and business (output component of GDP). Without confidence and especially the resulting increase in output, we are bo**oxed.
        Or, as a Times commentator wrote on this subject (he’d seen it on a tee-shirt at some demo or other) : “Buy more sh*t or we’re fu**ed.”
        By the way, have your LL boxes gone funny/changed? Mine have.
      - TomFairfax
        
        Like the t-shirt slogan.
        I don’t know what you mean about the boxes, so I guess they haven’t gone funny yet.
http://twitter.com/tristanpw1 TristanPriceWilliams

They have clearly underestimated the inability of Osborne to get things under control.
G.Osborne

The five year plan proceeds apace. All is well.
Daniel Speight

The phrase “close to zero” looks more like cover in case we end up with a negative ‘growth’ of between 0% and -1% for the year. How much longer can Mervyn King claim that all Britain’s banking problems had nothing to do with his leadership of the Bank of England?
hp

It is five years since the wheels came off the biggest credit (aka debt) bubble of all time.
Most policies since have been aimed at trying to re-inflate the bubble, but to little avail.
Two more years of economic flat-lining to go while the economy rebalances.

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