It was L, not W

In the UK recession is defined as two quarters of shrinkage. Since the first quarter of 2012 had a big fat growth of zero, the nine-month period between the end of 2011 and the middle of 2012 was therefore not a recession. Labour can now eat their words regarding double and triple dips, as we are in the midst of an ongoing recovery. Supposedly.

Of course anyone who has paid any attention to how much these figures are bobbing around the zero mark will realise that the definition of a recession is pretty meaningless, and it is possible that the recession might "reappear" if service-sector figures are revised downwards. The real problem is growth being of levels not much higher than statistical noise, which is why I have long argued that this W-shaped recession is really an L-shaped one.

The nasty bit of the adjustment is that the vertical part of the L-shape has been made substantially deeper, which means means current GDP is almost 20% below the pre-crisis trend. For those who read my previous remarks about how revenue follows GDP whereas spending follows a trend unchanged since 1999, the consequences for the national deficit are obvious.

Coincidentally yesterday I had two job application rejections and it had started making me wonder whether looking for work overseas was a good idea. It is things like this that make me realise that no matter how hard job-hunting is overseas, the UK predicament is worse.