Seems we are n for some interesting times in 2011, this will test the mettle of the coalition:

UK economy suffers 0.5% contraction in 2010 Q4

Osbourne has said the figures are disappointing and little else so far.

Is there anything that can be done or are they backed into a corner?

My guess is the latter and we just have to hope that it's a one off, but with inflation and unemploymnent on the rise confidence both business and consumer must be low.

I saw that the CBI yesterday were saying that the cuts so far had little to do with economics and more to do with politics, being un focused.

I can see it ending in tears again..........

tbh i'd wait till q1 is out for this year before gtting panic stations, the hardest winter for 100 years during the christmas boom time was bound to have a big impact.

you may find due to the 'catching up' companies and folks have had to do since then things are better than expected in q1.

Another couple of those and were heading back into deeper recession!

http://www.bbc.co.uk/news/business-12273200

Don't worry, the IMF says we are still on for 2% for the year. Just a bump in the road after a few cold mornings. Nothing to fear.

A bit of a bizarre situation though, to have inflation running away but GDP at a minus?

At least the official GDP figure might be rounded up.



Or down...

Still too early

We're suffering from net effect caused by the mass shrinkage of the construction industry. Its still stalled and seeing that it was previously a large growth sector, we became too dependent on it.

They're shocking numbers, but don't forget, most of the population were either at home or stranded at airports through December. The numbers will need to pick up in January and i'm sure Big Merv will suggest this will be the case in his speech tonight.

Oh yes, tell me about it.


zip (who works in the construction industry)

It's OK, the BOE have things under control. I'm sure the figures are a temporary blip due to the weather, and as soon as it clears up we'll be on our way to prosperity and good times.

Things are looking good.









Who am I kidding? We're screwed. Real inflation is +10%. Wages flat or decreasing. Jobs being shed. Output down. The £ is tanking today which will increase petrol, amongst other things. I noticed today that mortgage providers have started to remove IO loans,a nd are pricing in an interest rate rise to new deals. That will put a ticking time bomb under house prices as well.

On the upside a 62g Mars Bar is still 65p. Price hasn't gone up for 10 days.

The coalition are just playing politics and are way out of their depth with this. Osbourne is about as effective as Johnson would have been. Someone needs to talk to Ken Clark and soon.

Currently the fiscal pioicy is enough to screw over the economy, but not enough to actually affect the deficit.

Whether it's a big problem or not depends on your view. If never ending GDP growth is our goal then it is disappointing indeed. If that's the case then we are stuck in a very tricky situation, as it would arguably be more beneficial in the long-run for consumption to fall.

How did they expect inflation NOT to run away when they have added to fuel prices, allowed the oil companies to profiteer off the back of it, and done nowt when businesses put prices up by 4-5% for VAT instead of the required 2.5%?

Fuel is the main one: everything gets delivered. If fuel rises, how can delivery prices NOT rise?

Bloody marvellous!!!

We needed to cut next year when the recovery was well underway!

It's what you get when a couple of 'wet-behind-the-ears' Eton Boyz are in charge!!

NO HOPE!!!

Did I blink and miss a second consecutive quarter of negative growth or have you been at the gin again Lewis?

Why do you constantly troll, Peter?

It just makes you look a very sad and lonely individual.

There is a bit of talk about this business of "stagflation" where growth is stagnant yet unemployment and inflation remain high. It seems this causes problems for the government as to fix one problem exacerbates the other.

Just as long as that Labour scum don't find a way back in the next election, i'll take a chance on anybody!!!!

We are already taking a chance on anybody and the result is the same

And strangely enough, the rich continue to get richer and the gap between the rich and the poor continues to grow.........

Stagflation .... last time was around 1975 .... when inflation was 24%+

Yes, I remember it well ..... we are in for a bad 2011 .... 2012 and maybe 2013 - then we get a decent Government back in

Labour back in 2015 to sort out the mess!!

Stop it , Pete! Just stop, OK?
My sides are hurting laughing at the cr@p you post.

I heard on the radio that Cameron is blaming the weather for the late arrival of the recovery

I thought he had not had a real job before -- but apparently he has worked for British Rail as a platform announcer

Yeah, typical Tory ..... the weather was a bit chilly, so the economy has reversed into recession .... Only muppets who voted Tory will believe that old tripe.

I assume you're of the opinion that two "Ed's" are better than none?

Agree real inflation is higher, it's a joke the way they measure it.

I can't see them keeping interest rates so low for too much longer but which is the worse of two evils? Inflation or House Price collapse? Politically maybe the latter?

Lets hope for a House Price collapse!!!

but isn't the majority of the inflationary pressure from stuff outside our control, and external to the traditional "supply & demand" mechanics in the domestic economy (too much cash chasing to few goods)

such as rising world commodity prices (specifically energy) -- will raising interest rates tackle this?

Probably not, but that won't stop them doing it. They are back after 13 years and it's like nothing has changed.

High inflation ... check
High unemployment... check
Giving to the rich.... chek
Ignoring fuel prices... check
Taking from the poor.... check
Riots in the streets .... check

OK the Tories must be in power

Won't that destroy your little property portfolio?

Personally I'd like to see house prices correct because I want to buy a house soon LOL.