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Symbolism of a stagnating economy Symbolism of a stagnating economy
(4 days later)
By Hugh Pym Economics Editor, BBC News The signs point to economic growth being on a downward pathBy Hugh Pym Economics Editor, BBC News The signs point to economic growth being on a downward path
In one sense these figures won't affect the lives of shoppers and workers.In one sense these figures won't affect the lives of shoppers and workers.
They refer back to the three month period ending in June. That won't change peoples' experiences of the economy. They refer to the three month period ending in June. That won't change people's experiences of the economy.
And you could say there isn't much difference in practice between marginal growth and no growth.And you could say there isn't much difference in practice between marginal growth and no growth.
But the figures are highly significant for the economy.But the figures are highly significant for the economy.
They show that household spending actually fell in the quarter, further evidence of the sharp squeeze on consumers.They show that household spending actually fell in the quarter, further evidence of the sharp squeeze on consumers.
There was a positive contribution from overseas trade, but only because imports fell sharply, not because of any great boost to exports. Falling imports is another indicator of faltering consumer demand.There was a positive contribution from overseas trade, but only because imports fell sharply, not because of any great boost to exports. Falling imports is another indicator of faltering consumer demand.
Economic recordEconomic record
And there is a major symbolic aspect to the zero growth announcementAnd there is a major symbolic aspect to the zero growth announcement
This government liked to highlight the unbroken run of growth going back to 1997, when it came to power, and five years before.This government liked to highlight the unbroken run of growth going back to 1997, when it came to power, and five years before.
It is a record unmatched by any other leading economy.It is a record unmatched by any other leading economy.
That run has now come to an end. Few would predict when it will pick up again.That run has now come to an end. Few would predict when it will pick up again.
Of course these figures could yet be revised again, perhaps back upwards. But all the signs suggest that economic growth is on a downward path.Of course these figures could yet be revised again, perhaps back upwards. But all the signs suggest that economic growth is on a downward path.
The third quarter, which we are now in, and the fourth could well turn negative, signifying a technical recession.The third quarter, which we are now in, and the fourth could well turn negative, signifying a technical recession.
Even if flat or slightly positive, this year's growth will be the weakest since 1992.Even if flat or slightly positive, this year's growth will be the weakest since 1992.