Contrary to expectations hype, the UK economy did not grow in the third quarter of the year, says the National Institute of Economic and Social Research (NIESR).
Some economists predicted there would be growth in the three-month period, which would end the UK recession, but those of us living in the real world saw the slackness over the summer and no dramatic pick-up when everybody came back in September, so frankly, we are not surprised. Neither, I suspect has Alastair Darling, who slipped out a quote last week that he didn't expect growth until the end of the year. One can only speculate whether he has seen advance estimates of the numbers, but given the low key reaction to the NIESR numbers, I think we know where we stand.
The ONS will put out its official numbers on October 23, but in the meantime they say that industrial output had unexpectedly fallen in August, dropping 2.5% from the previous month. They say that this is due to a drop in oil production. Car manufacturing was up 11% due to Lord Mandelson's stimulus, but as we now know, 80% of the benefits of that initiative went overseas, while 100% of the costs stayed here.
Still, we can look forward shortly to more inanity and spin from the BBC to say that a 0.2% drop or whatever isn't as bad as the 0.6% drop last quarter. Wrong, it's 0.2% worse.
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