News

Rear View Mirror No Use On Big Dipper

23/12/2008

By Claire West

The economy shrank in the third quarter for the first time since 1992 and at a faster rate than previously thought, official data showed today.

However as the National Accounts data is produced at least seven weeks after the end of a quarter this is always going to be a 'rear-view' mirror as opposed to a road-a-ahead outlook. During relatively stable times this is all fine and dandy - however riding the current rollercoaster you know you're in a dip because you've felt yourself or seen others falling.

Commenting on the latest GDP figures:

Richard Lambert, CBI Director-General, said: "This is the steepest decline in GDP since the final three months of 1990, reflecting a marked slowdown in both the production and service industries. However, there is some evidence of an improving trend in the balance of payments figures and in household savings, which may be a sign of things to come."

Gross Domestic Product is an integral part of the UK national accounts and provides a measure of the total economic activity in a region. GDP is often referred to as one of the main 'summary indicators' of economic activity and references to 'growth in the economy' are quoting the growth in GDP during the latest quarter.

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