Business Advice

Recession - The End Of The Beginning?

10/09/09

By Brian Chernett

According to The Times on 29th August, "The slump in Britain's economy was less severe between April and June than initially estimated, official figures showed, raising hopes than the recession could be over. Gross Domestic Product (GDP) fell by 0.7 per cent between April and June, less than the first estimates of a 0.8 per cent drop. The annual decline in GDP was revised up from 5.6 per cent to 5.5 per cent in the second quarter, but this still marked the biggest contraction in the economy since records began in 1955."

Is this the end of the recession,...

...the beginning of the end or, as Winston Churchill famously said, the end of the beginning?

We may have stopped falling but, suggests the same Times article, "The British economy is performing worse than the German, French and Japanese economies - all of which have already emerged from recession - but economists said that UK GDP was likely to rise between July and September, marking the end of five quarters of recession. Official third-quarter figures are due in November."

Recovery must be just around the corner, if the recession has ended, mustn't it? What if it isn't and we stay where we are for months or years? Welcome the latest model of recovery, the L shaped recession, or, more accurately, the italicised L shaped recovery.

In an earlier Times article , Sir Martin Sorrell added to the alphabet soup of potential recovery options. "No stranger to the letter-based economic metaphor, having talked about a U or "bath-shaped" recession in the early part of the decade, Sir Martin's italicised L nevertheless left some colleagues confused, with company advisers struggling for an explanation. Sir Martin later declined to draw one when asked by The Times, but said that it indicated... continued on page two >

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