Me, me, me ... I said it first ... the sequel

This is a simulcast

 

It's official, the quarter ending the end of September shows that the UK Economy has slowed by 0.5%. Not a massve slwing down of course and such official statistics are subject to major errors but here is my comment on what has then happened.

 

Both the BBC and Financial Times have said that because ONE QUARTER's results have shown a negative return, Britain is therefore entering a recession.

 

The BBC said: recession looms

The FT said: Data confirm UK on brink of recession

 

Firstly, since when does ONE RESULT consitute a trend?

Secondly, whenever I talk to anyone about statistical analysis and forecasting, I advise them to consider a minimum of fiver periods/quartrs/years before they get too excited about anything.

 

We ought to look at the trend rather than sitting smugly at the thought of having said, "Me, me, me ... I said it first." Take a look at where these estimates of GDP rates of change have come from: http://www.statistics.gov.uk/cci/nugget.asp?id=192 You will see here the FULL picture of what is happening. Moreover, do take into account what the FT says, You should take the data on offer there and take a look at what is happening sector by sector. For example,they tell us that manufacturing has fallen by 1%: OK, that's serious; but since manufacturing accounts for only around 12% of the UK's GDP, that's not that serious overall is it?

The data released on Friday are the "flash estimate" of GDP, a number notoriously subject to revision. There was a grain of comfort in the fact that GDP for the second quarter was unrevised and showed zero, rather than declining, growth. (See http://www.ft.com/cms/s/0/7e9feb8a-a1a4-11dd-a32f-000077b07658.html?nclick_check=1)

These people have been desperate to drive house prices down for years, now they are desperate to build us all up for a year of a recession. The me, me, me brigade has, however, already started to doom monger their way to the front of the queue by talking about a slump for the UK. These people. In China, they get it right when they ask their journalists not to behave like this: scare mongering. I think the Chinese are right; and NO ONE is talking about censorship here either.

 

 

DW