I’m in the middle of writing a large post. So large that it is in the process of being split into a number of smaller ones, which I will post in due course.

However, with news today that the “UK Economy Comes To A Standstill” to quote the BBC Business News website’s headline, I find myself editing my post yet again.

You see, with all this doom and gloom on the economy, and in my mind we should be reading between the lines anyway, these ‘official figures’ from the Government are becoming a bit of a farce.

A few weeks ago, when I first started writing my forthcoming post (working-titled ‘2012′) it was announced that the UK was the only European country to record a positive growth in the last quarter; Apr, May, Jun. A meager 0.2% admittedly, but a positive growth none-the-less, and thus shunning the economists who reckon we are already beginning our decline into an inevitable recession.

Funny then, that that figure was just an estimate, and today the Office of National Statistics admitted “the economy stalled, showing no growth from the first quarter of 2008″ ending “a run of more than 15 years of consecutive growth in the UK.”

Yep. The growth in our economy was, allegedly, exactly 0%. Zero. Nothing. We did exactly the same amount of business in the first quarter as we did in the second. We didn’t grow by a tiny, weeny, little bit of a percentage point and nor did we shrink by a tiny, weeny, little bit of a percentage point. Nothing. No change whatsoever.

Doesn’t that strike you as a little odd that over a period of three months nothing can change at all in our economy. No change at all, either up or down?

Does me. Very odd. How can the movement of billions of pounds in our economy result in exactly the same as in the last quarter. When was the last time the economy didn’t change at all from one quarter to the next?

Here’s my take; here’s my “reading between the lines”.

The widely regarded and often used technical definition of a recession is two quarters of negative growth in a country’s economy.

Of course, our Government does not in any way shape or form wish to alarm the population of this country by mentioning the dreaded word ‘recession’ and so they do a very clever thing to buy themselves some time.

Assuming we have a very small positive growth in the second quarter (as in the reported 0.2% a few weeks ago) and a widely predicted, all the signs are there, negative growth in the third quarter, hopefully then, the government can sort things out during the forth quarter and everything will be hunk-dory because we never actually had two months of negative growth thus no defined economic recession. Yes? You following?

Ah, but what if we did have a very minor negative growth in the second quarter (even -0.05%) followed by a widely predicted, all the signs are there, negative growth in the third?

Whoops! Two consecutive quarters of negative growth and bang, a recession, as technically defined. The media will have a field day. Not good.

So what does our esteemed Government do? Yep, release a figure of 0% growth. Easy really when you think about. It’s not negative is it? It’s not positive either, but that’s beside the point.

Nuff said. I’m not an economist, but I know there’s a problem. House prices couldn’t keep rising with wages not keeping up in anyway shape or form. How long could the average house price possibly maintain a multiple of nine times the average salary? Didn’t add up, still doesn’t.

Where I live, a ‘villiage’ just outside of Woking, two estate agents have recently closed.

The main agency still there, Mann, owned by the country’s largest estate agency group, Countrywide, has six windows in which to display its property for sale. Only one of those windows has property in it. The rest are now filled with adverts for mortgages, house insurance, and the like.

The property insert inside our local freebee paper (an actual publication in itself) has shrunk considerably recently. The agents have much less property to advetise, and I suspect that most can’t afford to advertise what they have got.

We are going into a recession. And wether it is technically defined as happening at the end of this quarter, 30 Sept, or the end of the next 31st Dec, we are definitely going into one.

Probably better to prepare now isn’t it? Rather than waiting for the Government to admit it sometime in mid February when the growth figures for the last quarter of 2008 are announced?

Mind you, what are the odds of us having that magic 0% growth this quarter as well, huh?

Now that would be funny.

Goodnight.

This entry was posted on Friday, August 22nd, 2008 at 11:25 pm and is filed under Misc Posts. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.