How bad is this recession?

This is shaping up to be the longest recession the UK has ever experienced.

The first estimate of UK real GDP for the third quarter of 2011 is due to be published on 1 November. Analysis of monthly data and measures of business and consumer confidence suggests it will show growth of around 0.4 per cent compared to the second quarter. Most of this growth will be due to special factors that held back output in the second quarter: the extra bank holiday for the royal wedding and the disruption to supply lines caused by the Japanese tsunami.

With the economy not having grown at all over the previous three quarters, this means the economy will have grown by the same 0.4 per cent over the last year. Technically, this is not a recession - but it is about as close as it is possible to get to a recession without actually being in one.

In fact, it could be argued that the UK has still not emerged from the recession that began in 2008. Even after 0.4 per cent growth in the third quarter, real GDP will be 4 per cent lower than its peak level, reached in the first quarter of 2008. In none of the five previous serious recessions experienced by the UK economy in the last 100 years has real GDP been so far below its peak at a comparable period (data for the 1920s and 1930s are taken from NIESR).

A

On this basis, this is shaping up to be the longest recession the UK has ever experienced. If we take the Office for Budget Responsibility's (OBR's) latest forecasts for 2011Q4 onwards, real GDP will not exceed its previous peak until the second quarter of 2013 - fully five years after the recession began. This will make it a year longer than the previous longest recession - the one that began in 1979.

But the OBR's forecasts were made in March. The outlook for growth in the UK has deteriorated since then. Independent forecasters have been revising down their growth forecasts for 2011 and 2012 and the OBR is likely to do so too when it publishes its new forecasts on 29th November (alongside the Chancellor's Autumn Statement). If these new forecasts prove correct, this recession could last as long as six years.

Of course, as the last year has shown, there is a wide margin of error in growth forecasts, even for the relatively short-term. One reason for this year's disappointing growth has been higher food and energy prices, which have squeezed households' spending power, reduced demand and so led to cutbacks in output. If food and energy prices should fall sharply in 2012 - and they are more volatile, and thus harder to forecast, even than real GDP - then these effects could go into reverse. By this time next year, the economy might be growing at a healthy rate.

However, there are also reasons to fear growth will remain very weak for the next few quarters. Most areas of the global economy - even China - are less dynamic than they were a year ago. In particular, the effect of the euro zone sovereign debt crisis on the UK economy has only been felt in the last few months and it is likely to affect UK exports until well into 2012. The Chancellor talks of Britain being a safe haven in a storm, but even he must realise that the storm brewing in the euro zone has the potential to wreak havoc with the UK economy.

Despite the uncertainties, what is apparent is that the 'expansionary fiscal contraction' hoped for by the Chancellor and his supporters - in which cuts in the budget deficit would unleash a wave of entrepreneurial activity and strong private sector growth - has failed to materialise, and is unlikely to do so. As the Keynesians rightly warned, businesses are worried first and foremost about demand for their goods and services. Unsurprisingly, they have taken the view that a hike in the rate of VAT and substantial cuts in public sector spendingand employment, at a time when interest rates are already at rick-bottom levels, will reduce demand. So they have been extremely cautious about increasing investment spending and hiring extra workers.

After the GDP figures, all eyes will turn to the Autumn Statement. It is already too late to avoid this recession being the longest in the UK's history, and the external environment means 2012 may be just as tough a year as 2011. But it is not too late to take steps to promote stronger growth in the UK over the medium-term.

Those hoping for a change of course on the pace of deficit reduction are likely to be hoping in vain. The Chancellor and the Prime Minister have too much political capital invested in Plan A. Is it too much to hope, though, that the Chancellor, spurred by the underperformance of the economy over the last year, will announce a proper plan for growth? Not one that starts from a set of measures agreed by the coalition partners and attempts to build a plan around them. But one that starts by identifying what is needed for the economy to grow - increasing supplies of capital, labour and land and better ways of utilising them - and asks how these might be achieved. Perhaps it is; we will have to wait and see.

Tony Dolphin is Chief Economist at ippr

Tony Dolphin is chief economist at IPPR

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What David Hockney has to tell us about football

Why the sudden glut of blond footballers? A conversation I had with the artist back in 1966 gave me a clue. . .

In 1966, I went to interview David Hockney at a rather run-down flat in Bayswater, central London. He was 28 and had just won a gold medal at the Royal College of Art.

In his lavatory, I noticed a cut-out photograph from a newspaper of Denis Law scoring a goal. I asked if he was a football fan. He said no, he just liked Denis Law’s thighs.

The sub-editors cut that remark out of the story, to save any gossip or legal problems. In 1966 homosexual activity could still be an offence.

Hockney and a friend had recently been in the United States and had been watching an advert on TV that said “Blondes have more fun”. At two o’clock in the morning, slightly drunk, they both went out, bought some hair dye and became blond. Hockney decided to remain blond from then on, though he has naturally dark hair.

Is it true that blonds have more fun? Lionel Messi presumably thinks so, otherwise why has he greeted this brand-new season with that weird blond hair? We look at his face, his figure, his posture and we know it’s him – then we blink, thinking what the heck, does he realise some joker has been pouring stuff on his head?

He has always been such a staid, old-fashioned-looking lad, never messing around with his hair till now. Neymar, beside him, has gone even blonder, but somehow we expect it of him. He had foony hair even before he left Brazil.

Over here, blonds are popping up all over the shop. Most teams now have a born-again blondie. It must take a fortune for Marouane Fellaini of Man United to brighten up his hair, as he has so much. But it’s already fading. Cheapskate.

Mesut Özil of Arsenal held back, not going the full head, just bits of it, which I suspect is a clue to his wavering, hesitant personality. His colleague Aaron Ramsey has almost the full blond monty. Paul Pogba of Man United has a sort of blond streak, more like a marker pen than a makeover. His colleague Phil Jones has appeared blond, but he seems to have disappeared from the team sheet. Samir Nasri of Man City went startlingly blond, but is on loan to Seville, so we’re not able to enjoy his locks. And Didier Ndong of Sunderland is a striking blond, thanks to gallons of bleach.

Remember the Romanians in the 1998 World Cup? They suddenly appeared blond, every one of them. God, that was brilliant. One of my all-time best World Cup moments, and I was at Wembley in 1966.

So, why do they do it? Well, Hockney was right, in a sense. Not to have more fun – meaning more sex – because top footballers are more than well supplied, but because their normal working lives are on the whole devoid of fun.

They can’t stuff their faces with fast food, drink themselves stupid, stay up all night, take a few silly pills – which is what many of our healthy 25-year-old lads consider a reasonably fun evening. Nor can they spend all their millions on fun hols, such as skiing in the winter, a safari in the spring, or hang-gliding at the weekend. Prem players have to be so boringly sensible these days, or their foreign managers will be screaming at them in their funny foreign accents.

While not on the pitch, or training, which takes up only a few hours a day, the boredom is appalling, endlessly on planes or coaches or in some hotel that could be anywhere.

The only bright spot in the long days is to look in the mirror and think: “Hmm, I wonder what highlights would look like? I’ve done the beard and the tattoos. Now let’s go for blond. Wow, gorgeous.”

They influence each other, being simple souls, so when one dyes his hair, depending on where he is in the macho pecking order, others follow. They put in the day by looking at themselves. Harmless fun. Bless ’em.

But I expect all the faux blonds to have gone by Christmas. Along with Mourinho. I said that to myself the moment he arrived in Manchester, smirking away. Pep will see him off. OK then, let’s say Easter at the latest . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times