OECD Joins the UK Double Dip Recession Forecast Club
Economics / Double Dip Recession Jun 30, 2009 - 03:54 AM GMTBy: Nadeem_Walayat
Over the past 2 weeks many 'recognised' forecasting organisations have been issuing reports and releases that point to Britain targeting a double dip recession to be triggered by deep public sector spending cuts following the next election. The latest of which to join the club is the OECD which stated that Britain remained in deep recession and that the recovery is likely to be slow and be accompanied by rising unemployment.
"A significant risk is therefore that the current stimulus will lead only to a temporary pick-up in growth, followed by protracted stagnation."
My own analysis of February 2009 forecast that the UK should hit bottom by the third quarter with a strong economic recovery into mid 2010 to be followed by a high risk of a double dip recession due to the growing and mostly unrecognised at the time debt burden that would need to be dealt with following the 2010 General Election. Subsequent data and analysis has increasingly reinforced the outlook for a double dip UK recession and especially following late April's UK Budget revisions to the actual levels of government borrowing and budget deficit by the Chancellor, Alistair Darling that proceeded to rip to shreds the preceding consensus on the projected budget deficit as illustrated by the graph below.
Britains Great Depression 2008 to 2013
The actual outlook and forecast for the UK economy remains for a strong economic recovery into 2010, which will be followed by a severe second recession to rival that of the current recession in terms of GDP contraction of between 5% and 6% and which therefore implies a far worse outcome than the double dip recession that has in recent weeks is beginning to become the consensus expectation, however, which I first voiced in February 2009. Therefore for the Market Oracle readership to continue to remain 6 to 12 months ahead of the mainstream media and forecasting organisations, then a more correct term to now be utilised should be " Britains Great Depression of 2008 to 2013", that increasingly looks set to engulf the debt fueled economic recovery of 2010.
The OECD Six Months Behind the Curve?
Much of which is contained within the OECD report including recommendations has already been published at the Market Oracle in a series of in depth analysis dating back to November 2008, with the key analysis of :
- 28 Nov 2008 - Bankrupt Britain Trending Towards Hyper-Inflation?
- 04 Dec 2008 - UK Interest Rates Forecast to Crash to 1%
- 30 Dec 2008 - UK CPI Inflation, RPI Deflation Forecast 2009 (
- 17 Feb 2009 - UK Recession Watch- Britain's Great Depression?
- 20 Feb 2009 - UK Public Sector Contraction to Trigger Double Dip Recession
- 24 Feb 2009 - Gordon Brown Bankrupting Britain as Tax Payer Liabilities Soar- Update (
- 22 Apr 2009 - UK Budget 2009 Debt Deficit, Basic Rate Income Tax Could Rise to 30%
- 23 Apr 2009 - Darling's Recession Debt Crisis Budget, Britain's £1.2 Trillion Public Sector Black Hole
- 01 May 2009 - Labour Government Enslaves the British Tax Payer to a Decade of Paying for the Bankers Crimes
- 03 Jun 2009 - UK Economy Set for Debt Fuelled Economic Recovery Into 2010 General Election
- 11 Jun 2009 - Bankrupt Britain's Public Sector Double Dip Debt Recession on Deep Spending Cuts
- 29 Jun 2009 - Public Sector Pensions Deficit of £1.2 trillion Adds to Britains Debt Crisis
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By Nadeem Walayat
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Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 250 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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