Saturday, October 24, 2009

The ball is flat

Don't get us wrong. Paul Krugman is always a good read. And he's often right. But he's been wrong, wrong, wrong about the British economy going back a full year now, from when he was using Gordon Brown's supposedly brilliant financial sector policies as a stick with which to beat Hank Paulson.

Here's a post from just over 2 months ago which was presumably intended as a riposte to his stimulus critics --

[Bouncing Britain] Two months ago I wrote that there were hints of a relatively quick economic turnaround in Britain. Now those hints have gotten much stronger. Basically, aggressive monetary policy and the depreciation of the pound are giving Britain a boost relative to other advanced countries.

The chart above is the latest data on that boost. GDP growth on annual and quarterly basis. The best that can be said is that rate of output decline at the worst of the recession has not been maintained. But this is an economy still in recession, even as other advanced countries come out of it.

That's some bounce.

Chart: UK Office of National Statistics

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