www.bbc.co.uk/news/business-11624742

The real GDP figure will be known today for the three months after the election - and it will show the trend downwards that Q1 of 2010 and Q4 of 2009 showed.

What happened when suddenly "growth" shot up by 1.2% in the months April/May/June was that this was a massive amount of money pumped into the economy by BROWN in March and April before the election to try and give the feel good factor in order for a positive vote at the polls - it almost worked in the sense that the Tories failed to get a majority.

The sad thing for the rest of us is that this crazy spending led to FAKE GROWTH and the need to pay the money back with spending cuts.

We now teeter on the edge of the "DOUBLE DIP" because if growth does not return to the economy in the next two quarters then we could descend with all the cuts into another recession thus turning this into a Great Depression....though it is the longest recession since the 1930s already.

We have already made the decision not to spend any money in the next few months up to Christmas. It is too risky to get out there and spend - especially if the economy is on the brink again.

Anyone opening a business right now would be crazy to do so unless they have deep pockets. It is best to allow the big companies the playing field and they can take the risk with their resources. Once there is sustained growth again over 4 successive quarters and above 1% for two in a row that would be the point to think about entering the fray again.

At the moment because of stimulus - and QE - the figures are all skewed and dont show reality.

If you ask anyone out there they say things are very "quiet" and have been since July/August and have deteriated since September massively. Some people have no work and some shops hardly any customers. In music bands with 10 fans are getting shows in London and many of the remaining small venues are closing - the latest being the FREE ENTRY pioneer The Flowerpot who have lost their lease ! I went there in May and there were less than 20 people there for a gig so I am not suprised.

Until we start taxing the rich Premier League stars harder and the big companies harder - rather than hitting those on meagre benefits - we will get no-where.

The short term aim should be to get from the RICH in order to kick start the economy. This in turn would help the rich and their businesses and investments to gain in the long run - so they should be amenable to providing some of the money to fuel a recovery.

Osborne in trying to keep everyone happy is just papering over the cracks. Hoping that a World recovery or event will provide the stimulus to pull us out of this situation. Perhaps it will - but until then we will bump along the bottom.

I have been travelling around the UK again this week and seeing empty shops still exist everywhere. Some new businesses ( very small ) have sprung up recently but no more than you would expect over the year - and there are still more going to the wall as people give up - especially independent shops and chains.

With transport costs rocketing ( price of train - tube - fuel ) that will have a knock on effect on food prices in around 4 to 16 weeks time. In addition the VAT rise will also push up prices by 2.5% on top. This is going to kill demand after Christmas - and it could drop off a cliff in January to March plunging us back into recession.

So my guess is this :

GDP Q3 announced today 0.2% growth
GDP Q4 end of year announced end of Jan 0.3% growth
GDP Q1 2011 announced end of march 0.4 % recesssion
GDP Q2 2011 0.2% recession

and then the fun will start ! because tax revenue will be down and the natives will be restless. This will be YEAR 4 of the recession - nearly half a decade.......

Only the Olympics can save us ?

Weirdly they have just announced 0.8% growth for Q3. Which basically goes against every other indicator from retail etc. But they say Construction accounts for this.....ahem.....but with the housing market going backwards this will be shortlived.

This is still a drop of 0.4% since Q2 which is significant. So perhaps we will be at 0.4% growth in the current quarter if the trend downwards has been held up by construction.

Whatever way you look at it - construction effects none of us - which means the rest of the economy is even worse than they predicted.

hence the fact that the Stockmarket is tumbling since this announcement because they can see the "growth" is basically unsustainable in the face of where it has come from.

Not good news at all.

Looks all rather positive to me BR - I'm optimistic (but then I always am) that we have the right government for this time at last.

Thanks BR, you write:

"The sad thing for the rest of us is that this crazy spending led to FAKE GROWTH and the need to pay the money back with spending cuts."

You may disapprove of it, but what makes the growth "fake", any more than the bail out of the banks was fake?

Best Wishes,
Jim

JK2006 wrote:
Looks all rather positive to me BR - I'm optimistic (but then I always am) that we have the right government for this time at last.

well you do really look on the bright side of life !

Hi BR,

Yesterday you wrote:

"The real GDP figure will be known today for the three months after the election - and it will show the trend downwards that Q1 of 2010 and Q4 of 2009 showed."

In fact the trend was upwards. Unlike those few occasions when you get things right, however, we hear no further word from the prescient sooth-sayer himself.

This is the time-honoured scatter-gun approach to predicting and is guaranteed to score you a hit eventually.

Best Wishes,
Jim

Sorry BR,

It looks like I got it wrong and I retract my previous post.

Last quarter GDP growth was 0.8%.
Previous quarter GDP growth was 1.2%

Therefore the trend is downwards as you predicted.

Some how I got the wrong impression from BBC radio but I should have paid more attention to the details.



Best Wishes,
Jim

New Labour were a fake Labour party !

Jim - you have hit the nail on the head.

While ITK and JK and yourself are hailing the growth ! the real figure shows it going down.

The way in which this figure has been "Spun" by Osborne and the media is "New Labour" spinnery at its finest.

Osborne should be ashamed. Yes it has only gone down by around 25% when some were predicting a 75% drop.....but 25% drop is still quite a large drop in GDP in just one quarter.

The next quarter will be interesting.

I dont think the media can convince people that everything is growing when it quite clearly is not.

We need to watch this one carefully because it will show over time the first signs of whether it has all gone horribly wrong.