Triple-dip recession looms after figures suggest our economy has shrunk by 0.3%. So why has David Cameron has given us yet more uncertainty?

Now more than ever, businesses need reassurance. Where might it come from?

Share
Related Topics

A post Olympic hangover was pretty much expected for the economy. After growing at a whizzy 0.9 per cent when London, and much of the rest of Britain, was basking in the glow of the Games, the fourth quarter was always going to provide a come down.

But the scale of that come down is much worse than expected. Let’s be clear here, the ONS’s report of a 0.3 per cent contraction in the fourth quarter is only an early “sighter”. That figure is due to be revised twice and may not look quite so bad when all the data is in.

There was also disruption to the North Sea’s oil and gas fields, and if that’s taken out of the equation the economy shrank by only 0.1 per cent.

Triple dip

But let’s not beat around the bush here. The figures are still bad, whichever way you slice and dice them. Worse than most forecasters had feared.

There is now a very real chance of the economy slipping into a third recession, a triple dip, for which you’d need two consecutive quarters of negative growth.

We may get that. The snow will have had impact, there is no question of that. You could see it just by looking at the figures put out by Marston’s, the pub group earlier this week. Sales in its managed pubs open at least a year for the 16 week period to 19 January were 1.2 per cent ahead of last year. But for the 15 week period to 12 January they were 2.1 per cent ahead of last year. The weather froze up the company’s numbers by quit a significant extent.

Now that’s just a snap shot. Marston’s managed pubs are only a very small part of the economy. But the impact of the weather will filter through to other sectors and depress growth. We wouldn’t want too much more in the way of bad weather. 

Against this unhappy backdrop, the Prime Minister’s promise of a referendum on Europe couldn’t have come at a worse time. Businesses hate uncertainty, which is what he introduced.

Make no mistake, they will have heard what David Cameron said, and will now be fretting about the effect his promise will have on Britain, on its trade with the Continent, on its suitability as a bridge into the single market.

A lot from a little

Mr Cameron did the worst thing possible when it comes to encouraging business investment by introducing that fresh uncertainty, which was wholly unnecessary and driven by his own political considerations.

Many business will, as a result of it, hold off on investment. Or put their money elsewhere, in countries and markets which are “known” quantities. It’s not as if they can expect any help from the Chancellor George Osborne, who is mulishly sticking to his plan A: deficit reduction.

There is no doubt that the deficit does need addressing, and Labour is playing a deeply cynical game in condemning cuts it has no intention of reversing. But the economy is still on the critical list and a little fiscal stimulus might go along way. It might even help with those businesses which who have been put into a tizzy by Mr Cameron’s political games.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Business Development Manager / Sales - OTE £45,000

£35000 - £45000 per annum: Recruitment Genius: This company is a solutions / s...

Recruitment Genius: Sales Executive - OTE £45,000

£18000 - £45000 per annum: Recruitment Genius: A Sales Executive is required t...

Recruitment Genius: Test Development Engineer

£35000 - £40000 per annum: Recruitment Genius: Are you inspired to bring new a...

Recruitment Genius: Trainee Motor Engineer

£14000 - £18000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

Read Next
Kennedy campaign for the Lib Dems earlier this year in Bearsden  

Charles Kennedy: A brilliant man whose talents were badly needed

Baroness Williams
Nick Clegg (R) Liberal Democrat Leader and former leader Charles Kennedy MP, joined the general election campaign trail on April 8, 2010  

Charles Kennedy: The only mainstream political leader who spoke sense

Tim Farron
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific