Why is no-one talking about the double-dip?
The revised growth figures released earlier this week showing the current recession to be deeper than previously thought passed with the sort of muted media comment thatâ€™s been was typical of the coverage of the current recession in general – youâ€™d hardly know there is one. The media seems unable or unwilling to use it as a narrative within which to run other economic stories. Even Labourâ€™s efforts to push the line are half-hearted and lack conviction. Why is this turning into the recession that dare not speak its name?
The first answer may be that itâ€™s a victim of the definition of what a recession is. Rather like seasons are better defined by whatâ€™s happening in the natural world rather than dates on a calendar, so a recession is better defined by more than just growth numbers.
If the media wanted to run recession as a narrative than it would evidence it with stories about soaring unemployment, homes repossessed, many businesses going to the wall and a ballooning budget deficit – things which just aren’t happening. On those scores, things are no worse and in some cases (unemployment, for example), better than they were six months ago.
Itâ€™s also a pretty small-scale recession so far. The two quarters of decline have seen GDP fall by 0.7% – about one-tenth the scale of the 2008-09 recession. It fits more readily into a picture of output being more or less flat and money being tight but with the economy neither improving much nor getting markedly worse.
- For Labourâ€™s part, mentioning the double-dip runs the risk of reminding people who was in government during and before the first, much larger, recession.
Another factor is that the UK recession is clearly part of a much bigger story within Europe. When what is still by a long way Britainâ€™s major trading partner goes through what the Eurozone is going through, itâ€™s inevitably going to have an impact on exports and confidence in general. In as far as there are ongoing stories to report in the downturn, thatâ€™s where theyâ€™re to be found and as such, itâ€™s the Eurozone crisis which provides the ongoing narrative.
The likelihood is that five bank holidays, the wettest three months for many a year, and the most intense moments of the Eurozone Crisis so far will result in Q2 producing a negative growth figure as well. Will that mean the double-dip will start to become more of a political story? Not unless it feeds through to measures that impact much more directly on people. For the time being, the numbers are only of interest to statisticians and anoraks.