But, as this article by Larry Elliott points out, the economic indicators have been much worse within very recent memory. We've certainly had it so bad over the past couple of decades. He quotes Nick Parsons from NAB Capital
It's going to be a shocking year, but it doesn't bear comparison with the early 1990s, let alone 1979-81
and Insinger de Beaufort's Stephen Lewis, who reminds us that
Britain has yet to have a single quarter of falling output since the start of the credit crunch, and that after 15 years of uninterrupted growth, today's policymakers appeared to have forgotten how tough life was for their predecessors in the 70s and 80s. "In those days, policymakers did not wring their hands over the distress in the economy; it was at the end of the first quarter of 1981 that Sir Geoffrey Howe presented a budget that slashed public spending, to the consternation of 364 academic economists writing to the Times," Lewis said. "Perhaps it would be wrong to conclude that the framers of UK policy are made of weaker stuff now. More likely, after 15 years of settled economic conditions, they have forgotten how challenging the task of economic management can be."
Larry reminds us that the 70s and early 80s were horrendous - with 24 months of falling output in 1974 and 75 and economic freefall in 1979-81 powering us to over 3 million unemployed, a total almost reached in 1990-91 during five successive quarters of negative growth. Things may well worsen before they get better, but I'm prepared to predict that we'll see things start to recover during 2009.
As always in these matters, I bow to the expertise over at Snowflake - a blogger who has a good grasp of the reality of economics.
Revised US growth figures came out on Thursday. According to the latest estimates, their growth has been as follows:
Q4 2007 -0.05% (annualised equivalent -0.2%)
Q1 2008 0.2% (annualised equivalent 0.9%)
Q2 2008 0.8% (annualised equivalent 3.3%)
So they appear to have come out of their troubles. Our cycle is lagging behind theirs, but their recovery is hopeful given their massive effect on the world economy. In September tax rebates go out to Brits, oil is lower, wheat and corn prices are lower, most householders do not need to borrow further money. There is no reason there shouldn't be a recovery.
So we can keep George Osborne's straitjacket in the cupboard for a while longer, at least.