It's official: double dip continues into a third quarter as economy shrinks by 0.7 per cent

Economy now smaller than when coalition took power

By Alex Hern Published 25 July 2012

George Osborne is not impressed. Construction was the largest sectoral fall. Photograph: Getty Images

[UPDATED] The ONS's preliminary estimates for the second quarter of 2012 show that the economy shrank by 0.7 per cent, making this the first double-dip recession since World War II to last more than two quarters, and pushing the double dip recession further into the realm of a full blown recession in its own right. While some economic markers, particularly unemployment, are improving, overall it looks like the economy is getting worse rather than better.

The worst prior estimate for the figures was a contraction of 0.4 per cent. While the ONS does not explicitly blame the diamond jubilee for some of the contraction, they acknowledge that it introduces a large element of uncertainty into the accounts, and realistically it would only have a negative impact. In addition, the terrible weather is likely to have had a negative affect.

But those excuses are not enough to undo one crucial fact: the economy is now smaller than it was when the coalition took power.

View the discussion thread.

26 comments

Tue, 2012-07-31 20:46 — matthew fox (not verified)

You see, if only chump, it would help so much. No you seem to be running away from your initial comments, " low rates led to the disastrous housing boom "

Lets me repeat the facts, when Labour came to power, interest rates came in at 6.5 %. Labour " increased " the rate by 0.25% to 6.75%

Are you telling me 6.75% is low? Is that how you inspire a housing boom by upping the rate to 6.75%?

By Jun 1998, interest rates came in at a eye watering 7.5%, again was this part of a deliberate policy of increasing house prices?

From Jun 1998 to July 2003, interest rates declined to 3.5%, so no 2% interest rate in sight.

From July 2003, to July 2007, interest rates increased to 5.75%.

So again, this policy of " low " interest rates seem you be sinking quicker then the titanic. Why did interest rates increase Bozo555? come on chump?

Wed, 2012-08-01 15:51 — mike555

You must be the only one who doesn't think low rates affect house prices. Pitiful. Rates of 3.5% are historically very low, current interest rates are exeptionally low.

Fri, 2012-08-03 16:49 — Matthew Fox (not verified)

Again you are avoiding what you have written. Interest rates have never been at just 3.5%, pre 2009, full stop. But you keep using just one number to back up your "theory"

I know from an historical point of view, they are low, but so are interest rates around the world, or didn't you get that email either?

If don't want to talk about 7% rates in 1998 or 5.75% in 2007, go ahead and ignore the facts, as usual. Why is that?

Pitiful, dream on, I understand what factors underpin house prices, eg employment, economic growth, so if I was you, I wouldn't go there.

Fri, 2012-08-03 20:58 — mike555

So you're admitting rates were low now just like I said, after all that ridicule? Quite unbelievable. Or are you saying rates were high under New Labour, but I thought low rates were one of their key achievements? I wonder if you'll explain yourself? I doubt it.

I'm not the one who repeatedly avoids questions.

"Interest rates have never been at just 3.5%, pre 2009, full stop"

What are you on about? Where did I say that rates were just at 3.5% pre 2009? I said they reached 3.5% in July 2003, an indisputable fact. You mentioned 3.5% interest rates, I'm using your own figures, but you would argue whatever figures I used, even your own. I can answer your dismal ridicule all day long as is plain for all to see.

I don't mind talking about rates under New Labour, why don't you like talking about the tripling of house prices under New Labour and the effect it had on the poor? Funny that.

You also say I lie but cannot give any credible examples, another pathetic showing.

Fri, 2012-08-03 22:08 — matthew fox (not verified)

That old trick, trying to re-write my words, not really, you struggle with your words .

Let's discuss, what I wrote, not what you think I wrote, again, you seem to be leaving out some very important information.

" I know from an historical point of view, they are low "

Don't you understand the term, historical, is that why you left it out.

In the eighties and nineties, we had interest rates in the double digits, so if you compare the last few years again events which happened decades ago, you will find that they are low.

You only quoted the figure of 3.5%, please remember that, yet again you have avoided quoting the 7% + figures and the 5.75% figure, why is that?

But you being you, leave so many blanks. The interest rate of 3.5% lasted a whopping 117 days, after that they were raised by 0.25%. Also in 2004,the year after, there was 4 rate rises. Again more information, you didn't want to talk about.

Are you basing a decade worth of interest rates on 117 days, is that the plan?

The poor you talk about, are you talking about the 800,000 children taken out of poverty by Labour?

If Labour hated the poor so much, why did they introduce the National Minimum Wage, a policy praised by academics?

Why did Labour introduce the Working Tax credit and the Child Tax credit, if they had nothing but hatred towards the poor?

Did Labour take away £3 Billion worth of Working Tax credits from Low income families.

Pathetic, your still haven't got out of the starting blocks old chap.

Sat, 2012-08-04 11:03 — mike555

Dismal, which words am I supposed to have re-written then? It doesn't matter what figures I quote Fox you would argue whatever I used, rates were low overall under New Labour and house prices tripled, you even seem to agree rates were historically low now so what are you arguing exactly?

I don't think Labour hated the poor, I think the tripling of house prices was a disaster for them, and especially the young.

As for the poverty figures, tell us, are these the figures which exclude the cost of housing from the way they're calculated?

Sat, 2012-08-04 15:35 — matthew fox (not verified)

First of all, your quoting my figures, so let's not talk nonsense, I am the doing the leg work not you .

Lets examine, yet again, what I wrote, again your avoiding the obvious.

" So you're admitting rates were low "

Again your words, not mine, here is mine, again you seem unable to repeat my words, word for word.

" I know from an historical point of view, they are low, but so are interest rates around the world "

Some how, you don't seem to understand the term " historical "

" It doesn't matter what figures I quote " Of course the figures matter, they back up the argument. Yet again, your avoiding the facts, why is that?

But lets us focus on your original words, which have been shot to pieces.

" low rates led to the disastrous housing boom "

First you do a Ian Duncan Smith and focus on the lowest interest rate of 3.5%
As I have had to explain to you, that rate lasted for nearly four months, when compared to a decade of interest rates.

How did interests rates of 7% plus fuel a housing boom? How did rates that increased by over 2.25% circa 2004 to 2007 fuel house price increases?

Come on, stop the ranting and lets have some facts for a change.

Sat, 2012-08-04 16:50 — mike555

Fox, look up historical interest rates and house prices, that's all the proof anyone needs. Continue arguing with yourself.

Sun, 2012-08-05 16:47 — matthew fox (not verified)

No, your avoiding what you have written. Just remind me why you don't want to talk about interest rates of over 7% that alleged fueled a house price boom.

As I showed you, we only had 3.5% interest rates for a few months, no this empty-headed notion that they were the norm, during the first ten years of a Labour government is false.

Your lack of facts to back up your argument say it all.

Sun, 2012-08-05 16:47 — matthew fox (not verified)

No, your avoiding what you have written. Just remind me why you don't want to talk about interest rates of over 7% that alleged fueled a house price boom.

As I showed you, we only had 3.5% interests for a few months, no this empty-headed notion that they were the norm, during the first ten years of a Labour government is false.

Your lack of facts to back up your argument say it all.