Britain’s 17-year run of growth grinds to a halt

Aug 23 2008 by Alex Turner, Liverpool Daily Post

THE UK economy’s record run of unbroken quarterly economic growth has come to a halt, according to official figures published yesterday.

Britain has enjoyed 63 consecutive quarters of rising economic output but yesterday’s data showed growth had stopped.

And while the official figure of 0% growth in the three months to June means that the country has yet to see output fall, most observers are predicting that will happen later this year.

The last time the economy failed to register quarterly growth was in the same three months in 1992.

The growth seen since then is the longest unbroken run since records were first compiled at the start of the Industrial Revolution.

The second quarter figures follow data for the first three months of the year which showed weak growth of 0.2%.

Nevertheless, one local economist remains optimistic about the prospects for the full year. Peter Stoney, an honorary senior fellow at the University of Liverpool and editor of the Merseyside and North Wales Economic Prospect, believes the UK economy will still avoid recession.

Mr Stoney, speaking during an interview on this weekend’s LDP Business Week radio show, said: “Its just a single quarter’s figures and we are still not seeing negative growth.

“Our forecasts still show positive figures for the full year in the UK. Unemployment is still relatively low. We are not in the recession we were in during the early 1990s when unemployment was a lot higher. We see no reason to change our forecasts.”

The full interview with Mr Stoney can be heard at 11am on Sunday morning on CityTalk 105.9 and on digital radio.

Nevertheless, the gloomy figures will increase fears of recession, which is defined as two consecutive quarters of falling output.

Bank of England Governor Mervyn King last week said there was “bound to be a quarter or two” of negative growth, a view with which Howard Hackney, a partner at accountancy firm Grant Thornton’s Liverpool office, agrees.

Mr Hackney said: “I think a recession is coming although we have talked ourselves into it. We didn’t have to have one because the underlying economy is quite good.

“My gut feel is we’ll see the first period of negative growth in the September quarter.

“We’ll come out of it, possibly in the March quarter.

“It will be a relatively short, sharp shock.”

alex.turner