Wednesday, 27 April 2011

Another Prediction: UK Growth in the second quarter of 2011

I have three predictions outstanding from previous 2011 Blogs, and one successful prediction in the bag (Cardinal Keith O'Brien as Number One Easter sermoniser)

So to keep the ball rolling here's another prediction:

The UK economy grew by 0.5% in the first quarter of 2011, cancelling out the equivalent decline in the last quarter of 2010. My prediction for the second quarter (April - June) is that the UK economy will continue to flat line. Growth will not be higher than 0.5% nor will it decline by more than 0.5%.

Why?

This year's combination of late (and sunny) Easter and Royal Wedding has boosted domestic tourism (so that's a plus for growth), inward tourism by demented American Royalists (so that's another plus), and the manufacture of ceramic plates and mugs (up a tatfastic £500,000 so another plus). Plus a little bit of war in Libya must be doing a little bit of good for the arms manufacturers, plus a lot of police overtime about.

At the same time, planeloads of Brits have headed out of the country for short or extended periods (so that's a minus) and the whole holiday period has seriously disrupted normal business for over two weeks (another minus).

Conclusion: zero or minimal growth overall, every reason for the Bank of England to keep interest rates on hold, with a nice bit of inflation to chip away at the real cost of government and personal debt.

Results: Posted here at the end of July

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26 July: the Office of National Statistics has now released its calculation of the quarterly growth figure, 0.2%. Prediction fulfilled.

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