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

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Ashdown Group: Marketing Manager/Marketing Controller (Financial Services)

£70000 - £75000 per annum + benefits: Ashdown Group: Marketing Manager/Marketi...

Day In a Page

Read Next
Ed Miliband created a crisis of confidence about himself within Labour when he forgot to mention the deficit in his party conference speech  

The political parties aren't all the same – which means 2015 will be a 'big-choice' election

Andrew Grice
 

Beware of the jovial buffoon who picks fights overseas

Boyd Tonkin
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all