Hardly like a recovery
After five consecutive quarters of economic decline, figures out this Friday are expected to show that the statistically came to an end in the third quarter of this year (July-September).
I say "statistically" because I suspect only statisticians in the City and think-tanks will notice: they expect the latest figures for British gross domestic product (GDP) either to have flat-lined in Q3 or to show marginal growth of around 0.2%. Technically, that would mark the end of the recession but for most folk it would hardly%20feel%20like%20a%20recovery.
Gordon Brown will place great store by the recession ending. His hope is that, come the Spring election, people will accept that the worst is over and that a steady recovery is now gathering pace.
You can write the campaign speeches now: we're through the worst, we stopped a recession turning into a Great Depression, growth is returning -- don't let the Tories ruin it.
The PM genuinely believes he can win the next election with this pitch, . And it would be foolish to dismiss the possibility. But he has some formidable problems.
Growth had returned to the British economy in 1996/97 Last night Michael Heseltine explained to me why: "We didn't have enough growth for long enough to convince the British people that we'd returned the economy to prosperous growth. Gordon Brown will face the same problem -- even worse because the economy won't be growing as fast in the Spring of 2010 as it was in 1997 when we had to go to the country."
Mr Brown's problem is that people may feel the worst is over by next Spring -- but still not see much of a recovery. The Treasury expects only modest growth next year (so does the IMF and OECD) and senior Treasury sources have told me they expect unemployment to continue to rise until the election -- and even beyond.
Nor does the technical end of the recession in Q3 mean growth is guaranteed in subsequent quarters. The Chancellor is worried that growth will falter at the start of 2010 as consumers and businesses draw breath post-Christmas to determine if the recovery really is underway. He fears investment and spending decisions will be delayed until the outlook for 2010 becomes clearer. So the growth figures for Q1 2010 -- the last before the election -- could be pretty uninspiring, thus undermining Mr Brown's strategy of going to the country with a "we're on our way back" appeal.
Add to that the problem of trust -- all the polls show that voters don't trust what the PM tells them any more -- and you can see the size of the mountain Mr Brown has to climb. A recovery that is seen to be merely a statisticians' recovery is a tough basis on which to seek re-election.
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