James Moore: A happy new year? Third helping of recession is starting to look more likely

Outlook Remember when everyone was twitching about a double dip recession? Those seem like halcyon days now that there's a new phrase creeping its way into the popular lexicon: The triple dip.

The latest figures from the Office for National Statistics confirmed that the economy did indeed grow 1 per cent in the third quarter of this year, its best performance for a long time.

But the figure is a mirage. Growth between July and September was greatly boosted by one-off events such as the Queen's Jubilee and the Olympics. In their absence, a fall back to more realistic levels by the end of the current quarter was inevitable.

However, that fall may be steeper than we realise. Already there are disturbing signs that activity is slowing by more than can be accounted for by a post-Olympic drop-off.

The floods across the large parts of the country combined with widespread uncertainty and wafer-thin confidence mean the festive season will be a subdued one. If the economy isn't contracting now, it might not be too long before it is.

To qualify as a recession – our triple dip – there would need to be two consecutive quarters of negative growth. That may not happen but it is a realistic possibility.

Mark Carney was always going to find himself in a hot seat following his appointment as Governor of the Bank of England on Monday. He is about to find out just how hot.

There are things the government could do to help the situation. As if we needed any more gloom, the OECD yesterday warned that Britain's public finances will be in pretty poor shape throughout next year.

But, crucially, it again stated that Britain might want to consider easing up on its ambitious targets to cut the budget deficit at least until the economy is healthier.

That would be the pragmatic option, and the sensible one. It's true we might get downgraded by Moody's or Standard & Poor's but, really, who cares? It is a long time since those organisations had any clout with the bond markets which dictate our borrowing costs.

Sadly, sense is a commodity that is in short supply in Westminster. Against the backdrop laid bare by the OECD, the Government is contemplating yet more spending cuts which increasingly seem driven by ideology as opposed to sound economics.

All that and the potential of internecine warfare with our nearest trading partners to protect the Conservative Party's rightward flank from a surging UK Independence Party. Best wait until 2014 before saying "happy new year".