Trouble ahead for Osborne as economy is forecast to have shrunk again

Danger of a triple-dip recession as NIESR forecasts that the economy contracted by 0.3 per cent in the final quarter of 2012.

"The only function of economic forecasting is to make astrology look respectable", John Kenneth Galbraith once remarked and recent events have done nothing to prove him wrong. But the National Institute of Economic and Social Research (NIESR) has a better record than most and its latest forecast suggests that the economy shrank by 0.3 per cent in the final quarter of 2012.

"The only function of economic forecasting is to make astrology look respectable", John Kenneth Galbraith once remarked and recent events have done nothing to prove him wrong.

In the last quarter, as you'll recall, David Cameron and George Osborne boasted that we're "on the right track" after the economy grew by 1 per cent (later revised down to 0.9 per cent). But that figure was artificially inflated by the Olympic ticket sales, which added 0.2 per cent to growth, and by the bounce-back from the extra bank holiday in June, which added 0.5 per cent. To borrow Cameron's phrase, the government should never have assumed that "the good news will keep coming".

While a contraction in quarter four wouldn't represent an unprecedented "triple-dip recession" (that would require two successive quarters of negative growth), it would make it significantly harder for Osborne to claim that the economy is "healing". If the economy is shown to have shrunk in Q4, four of the last five quarters will have been negative. We'll know for sure when the Office for National Statistics publishes its first estimate of GDP on 25 January.

The longer-term outlook for the economy remains unremittingly grim. After a growth rate of 0.0 per cent in 2012, NIESR expects the economy to grow by little more than 1 per cent in 2013 and doesn't expect output to return to its pre-recession peak until 2014 at the earliest.

George Osborne said that the economy was "on the right track" after growth of 0.9 per cent in the third quarter of 2012. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Calm down, everyone – of course Nigel Farage is in the running for TIME Person of the Year

The former Ukip leader has been shortlisted for the iconic magazine list.

While your mole is no fan of former Ukip leader and triumphalist frog Nigel Farage, it has to scurry to his defence in this instance. There's been a big brouhaha (ie. some people on Twitter have posted a few half-hearted opinions and crap jokes) about the bonvivant Brexiteer being shortlisted for TIME's iconic Person of the Year.

He is one of 11 contenders for the position listed by the magazine, alongside the likes of Donald Trump, Mark Zuckerberg and Beyoncé. (What a dinner party that would be. We hope Zuck puts the photos up on Facebook.)

Why are people surprised by this? Farage is the reason the UK is leaving the European Union, and by doing so has made a big impact on national and global politics. Adolf Hitler and Joseph Stalin famously won the award, so we know it's not an endorsement, simply a measure of impact. And others on this year's list suggest this too: Recep Tayyip Erdoğan, Narendra Modi, Vladimir Putin, Donald Trump – all dubious political figures who have caused controversy.

So why the big deal about Farage?

Read more about TIME's shortlist here. The winner is announced tomorrow.

I'm a mole, innit.