The Bankwatch

Tracking the consumer evolution of financial services

Biggest Contraction since 1921 | NIESR UK

This new piece of analysis from NIESR (UK) makes the point based on prior recessions, that 20 – 30 months are left, at a minimum, before we get close to where GDP was before this recession period began. This point gets lots when the only measurement that media speak of is the last quarters +/-. What matters is where we are relative to where we began, and there a long way to go.

Our monthly estimates of GDP suggest that output grew by 0.3 per cent in the three months ending in December, following on from a growth of 0.2 per cent in the three months ending in November. These data show that GDP fell by 4.8 per cent in 2009. This is a bigger fall than in any year of the great depression and is Britain’s biggest contraction since 1921. As the graph below shows, the broader picture of the depression is that output fell sharply for twelve months until March and has not changed very much since then, although evidence of a recovery is starting to emerge.

Figure 1: The Profile of the Depression: Months from the Start of the Depression

Calculated from three-month moving averages of monthly GDP

Written by Colin Henderson

January 14, 2010 at 00:27

Posted in Uncategorized

Tagged with ,

%d bloggers like this: