Britain’s economy contracted by 0.4 per cent between July and September, according to official figures. Almost every City analyst expected there to be positive growth in the third quarter. But, as usual, every City analyst got it wrong.
So we are still in recession. Germany, France and Japan have all come out of recession – technically – and we haven’t.
This is the first time our gross domestic product (GDP) has contracted for six consecutive quarters since quarterly figures were first recorded in 1955. The economy contracted 5.2 per cent compared with the same period last year, which was marginally better than the record figure of 5.5 per cent in the previous three months.
Unemployment is now 2,470,000. It has risen for 14 successive months. This is part of the war on workers. Manufacturing (not financial services where the crisis originated) has been the hardest hit sector. Manufacturing has lost 8.5 per cent of its jobs; finance and business services 3.8 per cent. Recent figures showed a 2.5 per cent decline in industrial output in August alone.
The recession has hit investment into Britain harder than any other nation. Last year, foreign direct investment (FDI – regarded by bourgeois economists as a measure of success) into Britain fell by half to £97 billion. Globally, foreign investor flows fell by 44 per cent in this year’s first quarter. World FDI fell from $1,700 billion last year to (probably) less than $1,200 billion this year. Total investment here fell between April and June by more than 18 per cent on last year.
Without investment, what recovery can there be? One in five people aged between 16 and 24 – a million young people – is now registered as looking for work, the highest on record.
Both Labour and the Tories have said they want to more than halve the budget deficit by 2013/14. At the TUC, Brown threatened cuts, then tried feebly to soothe his audience by repeating his age-old promise to “implement a blacklist on uncooperative tax havens”. Leaked Treasury documents include plans to cut spending across departments by a total of 9.3 per cent over four years from 2010. There is a Con-Lab-Lib united front demanding spending cuts, all to meet arbitrary fantasy financial targets.