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Che cavolo! Labour incompetence: Italian economy overtakes UK

I seriously don't know which is more dangerous: incompetent muppets
running the show or fools so mired in their folly they are oblivious
to it.

If all the "wise" men of Britain have been unable to regulate or
legislate us out of recession, then the right course of action is
surely the other way of deregulation and delegislation.

Everything from H&S, maternity rights, equal opportunities and other
PC absurdity has to go if the UK is to become economically competitive
again.

N5

http://www.timesonline.co.uk/tol/news/uk/article6888251.ece

From The Times
October 24, 2009
Traders sneer at 'useless' economists as data shows surprise fall in
GDP
Ian King and Gráinne Gilmore

For City traders and economists, punch-drunk after two of the most
extraordinary years in financial history, it was yet another moment of
drama.

At 9.30am yesterday, news hit the screens that the UK economy
contracted by 0.4 per cent between July and September, shattering
hopes that Britain had pulled out of recession and signalling the
country’s longest downturn since records began in 1955.

The market reaction was instant. The pound, which has already suffered
heavy falls this year, was pummelled on foreign exchange markets. By
comparison, the price of gilts — the IOUs issued by the Government —
shot up, in anticipation that the Bank of England will be forced into
buying more bonds as part of its drive to pump cash into the economy.

In the Canary Wharf offices of BGC Partners, an international
brokerage, Howard Wheeldon was pinned to his screen. Mr Wheeldon, a
senior strategist, said: “For a few seconds, and that’s all, there was
a stunned shock — to be followed by resignation. And then someone
said, ‘Economists are no bloody good, are they?’ because so many of
them had said the recession ended in the third quarter. The mood was
one of resignation — plus the odd sneer to the effect that anyone who
had thought the economy had come out of recession was living in cloud
cuckoo land.”

Little cheer was added when Citigroup later calculated that Britain’s
economy had been overtaken by Italy. The figures showed that in the
third quarter of the year, Britain’s economy generated about £347.5
billion in cash terms compared to Italy’s estimated £350 billion,
making Britain the world’s seventh largest economy.

Many economists insist that the Office for National Statistics got
yesterday’s growth figures wrong. Many surveys of business activity
carried out during the period had pointed to modest growth. The
Purchasing Managers Indices for services and manufacturing — which
were both extremely accurate in predicting the start of the recession
— had suggested a pick-up.

Chris Williamson, the chief economist at Markit, which produces the
surveys, insisted that the ONS data was wrong. He said: “We think the
numbers are wrong. A whole host of indicators other than ours show
that the economy grew in the third quarter, powered by a stronger
services sector. There is a risk that these figures could lead to
disastrous policy mistakes. The ONS has always found measuring the
services sector difficult.”

Others pointed out that Britain is unusually early in providing a
“first cut” of such data — which has often subsequently had to be
revised upwards or downwards.

The row will raise further questions about the ONS, whose data has
been frequently criticised over its reliability in recent years,
particularly its retail sales figures. That data has become so
mistrusted that the British Retail Consortium, whose members include
household names such as Marks & Spencer, Tesco and Boots, has resorted
to publishing its own figures.

The ONS stressed that the figures were only preliminary estimates,
insisting that, where GDP data has been revised in the past, the
average tweak has only been marginal.

However, the ONS has twice revised down its preliminary estimates of
GDP this year, most notably adjusting figures to show that the economy
contracted by 2.5 per cent from January to March — compared with an
earlier reported decline of 1.9 per cent.

Assuming yesterday’s figures are broadly accurate, though, the economy
will have to register growth of 6.5 per cent during the last three
months of the year — a quarterly rate never seen before — to meet
Alistair Darling’s forecasts for 2009.

The Chancellor predicted in March that the economy would contract by
between 3.25 per cent and 3.75 per cent this year. Economists now
consider that hopelessly optimistic. There are also doubts over
whether Mr Darling’s forecast of 1.25 per cent growth next year is
possible.

Howard Archer, chief UK and European economist at IHS Global Insight,
said: “It looks increasingly questionable whether GDP growth can even
reach 1 per cent in 2010 as it is coming from a weaker base.”

Mr McGuire added: “In terms of our growth outlook, it is clearly ‘W’
shaped — the UK is the best candidate for a ‘double dip’ recession. W
e
think things look better for the last three months of the year but
that is based almost entirely on a pick-up in consumer spending ahead
of the VAT hike in the new year.

“The Government may be able to say that, as promised, they have led
the UK out of recession — but we think they will only have done so by
borrowing growth from next year.”

Data just published shows that the services sector in the eurozone is
now expanding at its fastest rate for nearly two years. Separately,
data for Germany pointed to the country’s manufacturing sector
expanding for the first time in more than a year, while another survey
showed that business morale is also picking up. With Japan, Germany
and France having pulled out of recession between April and June, and
data published later this month expected to point to the US having
done so between July and September, economists fear that Britain looks
exceptionally weak.

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