The bad economic news keeps flooding in

UK manufacturing output hits a 26-month low as growth forecasts are cut again.

The bad economic news keeps flooding in on a daily basis -- but there's still no response from George Osborne.

Manufacturing had been booming -- not least because of exports driven by the significant depreciation in the pound -- but that appears to be heading into reverse. Today's PMI for UK manufacturing fell to a 26-month low. Production fell for the first time since May 2009, as new order inflows declined at the most marked pace in almost two and a half years. The trend in new export business was also substantially weaker than just one month ago. Manufacturers linked the reduction to weak domestic demand, rising global economic uncertainty and lower levels of new export business.

Rob Dobson, senior economist at Markit, commenting on the data, argued: "The second half of 2011 has, so far, seen the UK manufacturing sector, once the pivotal cog in the economic recovery, switch into reverse gear . . . The sudden and substantial drop in new export orders is particularly worrisome, with UK manufacturers hit by rising global economic uncertainty, just as austerity measures are ramping up at home. As consumer and business confidence are slumping both at home and abroad, it is hard to see where any near-term improvement in demand will spring from."

Then, today, the British Chambers of Commerce cuts its growth forecast. They are now expecting GDP growth of 1.1 per cent in 2011 (down from 1.3 per cent) and 2.1 per cent in 2012 (down from 2.2 per cent), rising to 2.5 per cent in 2013. This is much less than the Office for Budget Responsibility, for example, which is forecasting 1.7 per cent in 2011 and 2.5 per cent in 2012.

This lowering of the growth forecast is consistent with evidence from Grant Thornton's UK Business Confidence Monitor for Q3 2011, conducted between 3 May and 29 July 2011, which showed that business confidence had fallen sharply. The confidence index stands at 8.1, down from 13.7 in Q2 2011 to its lowest level since Q3 2009.

The Confidence Index has been on a downward path since a post-recession bounce-back that started in late 2009 and peaked in the first half of 2010, just as this coalition government took office. Notably, the survey suggested that business confidence in the manufacturing and engineering sectors was "relatively downbeat" and continued to weaken.

And then there were some really daft comments from Andrew Sentance in an op-ed piece in the Wall Street Journal, in which he argued against further stimulus.

"The global economic recovery has been under way for about two years . . . Monetary policy needs to shift away from the emergency settings that were put in place to halt sharp falls in demand in late 2008 and 2009. The deflationary risks that were then a worry have now receded. Indeed, in some countries -- such as the UK -- persistent inflation is now the bigger worry . . . further stimulus of the demand side would be a move in the wrong direction. It may appear to offer the prospect of short-term respite from economic difficulties. But it will not help us secure the conditions for sustainable growth and lasting economic recovery." Yes it will.

Sentance couldn't be more wrong -- as data from the past few days has made clear, the global economy is slowing fast. It is now apparent that his votes for increasing interest rates at his last 12 meetings were completely misguided as growth plummets and unemployment rises. The UK now has a growth problem, rather than an inflation problem. Wrong on interest rates and wrong on austerity.

Ed Balls had it right today on the World at One: "If you adjust for the high oil prices [and] the fall in the exchange rate, underlying inflation in Britain today is very low indeed. That is reflected in long-term interest rates being very low. Why is that? Because our economy isn't growing . . . Manufacturing output is down and, all around the world in America, in Europe and in Britain, the challenge for central bankers is to do what they can with monetary policy to support growth and get things moving again. The trouble is, in the very unusual global situation we're in, it is hard for interest rates to do that job. That is why there is a challenge to fiscal policymakers to act, as well."

Now is the time for the coalition to act to stimulate growth.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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The dog at the end of the lead may be small, but in fact what I’m walking is a hound of love

There is a new, hairy face in the Hovel.

There is a new, hairy face in the Hovel. I seem to have become a temporary co-owner of an enthusiastic Chorkie. A Chorkie, in case you’re not quite up to speed with your canine crossbreeds, is a mixture of a chihuahua and a Yorkshire Terrier, and while my friend K— busies herself elsewhere I am looking after this hound.

This falls squarely into the category of Things I Never Thought I’d Do. I’m a cat person, taking my cue from their idleness, cruelty and beauty. Dogs, with their loyalty, their enthusiasm and their barking, are all a little too much for me, even after the first drink of the day. But the dog is here, and I am in loco parentis, and it is up to me to make sure that she is looked after and entertained, and that there is no repetition of the unfortunate accident that occurred outside my housemate’s room, and which needed several tissues and a little poo baggie to make good.

As it is, the dog thinks I am the bee’s knees. To give you an idea of how beeskneesian it finds me, it is licking my feet as I write. “All right,” I feel like saying to her, “you don’t have to go that far.”

But it’s quite nice to be worshipped like this, I have decided. She has also fallen in love with the Hovel, and literally writhes with delight at the stinky cushions on the sofa. Named after Trude Fleischmann, the lesbian erotic photographer of the Twenties, Thirties and Forties, she has decided, with admirable open-mindedness, that I am the Leader of the Pack. When I take the lead, K— gets a little vexed.

“She’s walking on a loose lead, with you,” K— says. “She never does that when I’m walking her.” I don’t even know what that means, until I have a think and work it out.

“She’s also walking to heel with you,” K— adds, and once again I have to join a couple of mental dots before the mists part. It would appear that when it comes to dogs, I have a natural competence and authority, qualities I had never, not even in my most deranged flights of self-love, considered myself to possess in any measurable quantity at all.

And golly, does having a dog change the relationship the British urban flâneur has with the rest of society. The British, especially those living south of Watford, and above all those in London, do not recognise other people’s existence unless they want to buy something off them or stop them standing on the left of the sodding escalator, you idiot. This all changes when you have a dog with you. You are now fair game for any dog-fancier to come up to you and ask the most personal questions about the dog’s history and genealogy. They don’t even have to have a dog of their own; but if you do, you are obliged by law to stop and exchange dog facts.

My knowledge of dog facts is scant, extending not much further beyond them having a leg at each corner and chasing squirrels, so I leave the talking to K—, who, being a friendly sort who could probably talk dog all day long if pressed, is quite happy to do that. I look meanwhile in a kind of blank wonder at whichever brand of dog we’ve just encountered, and marvel not only at the incredible diversity of dog that abounds in the world, but at a realisation that had hitherto escaped me: almost half of London seems to have one.

And here’s the really interesting thing. When I have the leash, the city looks at me another way. And, specifically, the young women of the city. Having reached the age when one ceases to be visible to any member of the opposite sex under 30, I find, all of a sudden, that I exist again. Women of improbable beauty look at Trude, who looks far more Yorkie than chihuahua, apart from when she does that thing with the ears, and then look at me, and smile unguardedly and unironically, signalling to me that they have decided I am a Good Thing and would, were their schedules not preventing them, like to chat and get to know me and the dog a bit better.

I wonder at first if I am imagining this. I mention it to K—.

“Oh yes,” she says, “it’s a thing. My friend P-J regularly borrows her when he wants to get laid. He reckons he’s had about 12 shags thanks to her in the last six months. The problems only arise when they come back again and notice the dog isn’t there.”

I do the maths. Twelve in six months! That’s one a fortnight. An idea begins to form in my mind. I suppose you don’t have to be a rocket scientist to work out what it is. But no. I couldn’t. Could I?

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism