The UK could already be back in recession, say forecasters

The Item Club and the CEBR say Britain is in a double-dip recession. Where is the government's plan

Barely a week goes past without more bleak economic news. And now, according to two top forecasters, it appears that the UK could already be back in recession.

Ernst and Young's Item Club and the Centre for Economics and Business Research (CEBR) both believe that GDP shrank in the final quarter of 2011 and will fall again in the current three month period. A recession is defined as two consecutive quarters of contracting output.

This may come as no surprise (the OECD predicted similar results in November last year), but the Item Club's predictions are particularly worrying for the coalition. It is the only non-governmental forecasting group to use the same economic model for its forecasts as the Treasury and the Office for Budget Responsibility (OBR).

The Item Club's report predicts that the economy will grow just 0.2 per cent this year, and will not return to normal levels of growth until 2014, because the eurozone crisis will hold back investment in the UK. Even if a solution is found, it predicts that Britain's economy will still only grow by 1.75 per cent in 2012 and 3.8 per cent in 2014. Nor is it optimistic about job prospects, stating that unemployment will rise by a further 300,000 to just below three million people as the private sector fails to compensate for public sector job losses.

The CEBR reiterates these findings. It revised down its forecast for growth for 2012 from 0.7 per cent growth to a decline of 0.4 per cent, with a risk of decline of 1.1 per cent if the situation in the eurozone worsens.

For the time being, then, there is little light at the end of the tunnel. Amid these depressing forecasts about growth and unemployment, IPPR North has humanised the statistics by analysing ONS figures to show that in some areas of the UK, there are 20 jobseekers for each vacancy. In the worst affected area, West Dunbartonshire, there are 20 for each vacancy, while in London, Lewisham has 16 jobseekers for every job. It found that the national average was four jobseekers for every vacancy.

If these predictions are borne out -- and past example suggests that the most pessimistic forecasts tend to be the correct ones -- then it will be the double dip recession that the New Statesman has been warning of since March 2009. In October 2009, our Economics Editor David Blanchflower wrote:

Lesson number one in a deep recession is you don't cut public spending until you are into the boom phase. John Maynard Keynes taught us that. The euro area appears to be heading back into recession and the austerity measures being introduced in certain eurozone countries, especially those in Germany, will inevitably lower UK growth, too. It is extremely unlikely, therefore, that net trade will leap to our rescue. taught us that. The consequence of cutting too soon is that you drive the economy into a depression, with the attendant threats of rapidly rising unemployment, social disorder, rising poverty, falling living standards and even soup kitchens.

The government's sole economic priority thus far has been balancing the books. Will they come up with a plan for growth, faced with more and more bleak predictions? Somehow, it doesn't seem likely.

 

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Leader: History is not written in stone

Statues have not been politicised by protest; they were always political.

When a mishmash of neo-Nazis, white supremacists, Trump supporters and private militias gathered in Charlottesville, Virginia on 12 August – a rally that ended in the death of a counter-protester – the ostensible reason was the city’s proposal to remove a statue of a man named Robert E Lee.

Lee was a Confederate general who surrendered to Ulysses S Grant at the Appomattox Court House in 1865, in one of the last battles of the American Civil War – a war fought to ensure that Southern whites could continue to benefit from the forced, unpaid labour of black bodies. He died five years later. It might therefore seem surprising that the contested statue of him in Virginia was not commissioned until 1917.

That knowledge, however, is vital to understanding the current debate over such statues. When the “alt-right” – many of whom have been revealed as merely old-fashioned white supremacists – talk about rewriting history, they speak as if history were an objective record arising from an organic process. However, as the American journalist Vann R Newkirk II wrote on 22 August, “obelisks don’t grow from the soil, and stone men and iron horses are never built without purpose”. The Southern Poverty Law Center found that few Confederate statues were commissioned immediately after the end of the war; instead, they arose in reaction to advances such as the foundation of the NAACP in 1909 and the desegregation of schools in the 1950s and 1960s. These monuments represent not history but backlash.

That means these statues have not been politicised by protest; they were always political. They were designed to promote the “Lost Cause” version of the Civil War, in which the conflict was driven by states’ rights rather than slavery. A similar rhetorical sleight of hand can be seen in the modern desire to keep them in place. The alt-right is unwilling to say that it wishes to retain monuments to white supremacy; instead, it claims to object to “history being rewritten”.

It seems trite to say: that is inevitable. Our understanding of the past is perpetually evolving and the hero of one era becomes a pariah in the next. Feminism, anti-colonialism, “people’s history” – all of these movements have questioned who we celebrate and whose stories we tell.

Across the world, statues have become the focus for this debate because they are visible, accessible and shape our experience of public space. There are currently 11 statues in Parliament Square – all of them male. (The suffragist Millicent Fawcett will join them soon, after a campaign led by Caroline Criado-Perez.) When a carving of a disabled artist, Alison Lapper, appeared on the fourth plinth in Trafalgar Square, its sculptor, Marc Quinn, acknowledged its significance. “This square celebrates the courage of men in battle,” he said. “Alison’s life is a struggle to overcome much greater difficulties than many of the men we celebrate and commemorate here.”

There are valid reasons to keep statues to figures we would now rather forget. But we should acknowledge this is not a neutral choice. Tearing down our history, looking it in the face, trying to ignore it or render it unexceptional – all of these are political acts. 

The Brexit delusion

After the UK triggered Article 50 in March, the Brexiteers liked to boast that leaving the European Union would prove a simple task. The International Trade Secretary, Liam Fox, claimed that a new trade deal with the EU would be “one of the easiest in human history” to negotiate and could be agreed before the UK’s scheduled departure on 29 March 2019.

However, after the opening of the negotiations, and the loss of the Conservatives’ parliamentary majority, reality has reasserted itself. All cabinet ministers, including Mr Fox, now acknowledge that it will be impossible to achieve a new trade deal before Brexit. As such, we are told that a “transitional period” is essential.

Yet the government has merely replaced one delusion with another. As its recent position papers show, it hopes to leave institutions such as the customs union in 2019 but to preserve their benefits. An increasingly exasperated EU, unsurprisingly, retorts that is not an option. For Britain, “taking back control” will come at a cost. Only when the Brexiteers acknowledge this truth will the UK have the debate it so desperately needs. 

This article first appeared in the 24 August 2017 issue of the New Statesman, Sunni vs Shia