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UK officially in recession for first time in 11 years
- LatteLazy 6y agoComparing corona-quarantine times with normal times is silly.
- 0134340 6y agoRecessions aren't "normal times". Despite externalities, whether economic abnormalities, pandemics and so on, it still hits the savings account the same and worth comparing for history's sake.
- celticninja 6y agoBut the recession has hit the UK harder than many other European countries. That strikes me as comparable and indicates that it has been more poorly handled by the UK than by other countries.
- niklasrde 6y agoDo you have any more figures than what's in the article? In the article it's got these figures: > The economy is more than a fifth smaller than it was at the end of last year. This fall is not as bad as the 22.7% decline in Spain, but about twice the size of contractions in Germany and the US. I think Germany's handling was exceptional anyway, and for the US it hasn't hit fully yet. I reckon there's a lot more to come in the UK, as well, when the government furlough scheme comes to an end. And not to forget to mention the country is still in the Brexit transition period, which runs out at the end of the year.
- pimterry 6y agoInterestingly, the Q2 results for Spain are actually better than for the UK (-18.5% vs -20.4%). It's only the comparison to the end of 2019 numbers specifically where Spain comes out worse. Debatable why, plausibly because the Spanish lockdown started earlier in Q1. Since the entirety of the rest of the article is about today's Q2 results specifically though, a comparison of those would be more relevant. Smells like the BBC cherry picking to try and find anything where the UK isn't in last place.
- makomk 6y agoIt's almost certainly because the Spanish lockdown started earlier in Q1 - if I remember rightly, other articles have mentioned that the UK saw less of an economic decline in Q1 than many other European countries precisely because of the timing of our lockdown. Comparing Q1 to Q2 results and comparing countries based on that would therefore be misleading, because it's not measuring actual economic differences but an artifact of how lockdown timing happened to align with our arbitrary measurement cut-offs. (Also, speaking of misleading, it's interesting that all of a sudden the BBC can correctly compare US GDP figures with European ones now that it's the UK they're comparing with. Previous coverage quoted US quarterly figures that had been multiplied by four to annualize them next to non-annualized European ones, making it look like the US was doing worse economically than other European countries like Spain when it was doing better.)
- luckylion 6y agoI don't believe it's very productive to say who handled it well and who didn't while we're still in the middle of it. Is a massive stimulus/public intervention the right call, or does it just delay the shrinking but adds plenty of public debt? The same, I believe, goes for comparing infections & death rates. Calling a marathon by who's in the lead at the 10km mark can turn out correct, but it doesn't have to.
- raxxorrax 6y agoI think any handling mainly has come down to luck and how people responded to the threat. The prevalence of the virus isn't evenly spread throughout different regions with mainly the same rules, with just some local adaptations. I think luck is at least as much important as policies, probably much more relevant though. There is a well made map in this article: https://en.wikipedia.org/wiki/COVID-19_recession https://en.wikipedia.org/wiki/COVID-19_recession
- monkeydust 6y agoThe UK stayed in a deep state of lockdown longer than most other European countries, that's why the relative numbers are bad. Question is, did it work, was it worth it? (saving lives)
- makomk 6y agoYeah, the one major European country with even worse GDP decline than the UK is Spain, which also happened to have what was generally considered to be the strictest lockdown in Europe. Sweden, on the other hand, had a much smaller decrease in GDP despite their economy being heavily reliant on exporting to the rest of Europe.
- OJFord 6y ago> Spain, which also happened to have what was generally considered to be the strictest lockdown in Europe. And also most flouted?
- heracles 6y agoYes, but we also didn't close down our economy nearly as much as most other European countries. I'm just saying that there are too many variables to conclude anything at this point, especially given that we won't have a good guess on "final" death toll until widespread immunity (from vaccine or otherwise).
- matthewmacleod 6y agoThis was arguably because the UK fannied around and failed to implement its lockdown early enough, meaning that the resulting lockdown which was required anyway was more impactful than it would have been. Not just economically, but in terms of lives lost.
- the-dude 6y agoAt the start, they planned to ignore it completely and aim for herd immunity.
- deleted 6y ago[deleted]
- rosstaylor90 6y agoNo, the primary reason is that the UK is a heavily service-based economy. Quarantine impacts the service-based subset of the economy the most. Therefore it makes sense that the UK would be hard hit. A “nation of shopkeepers” suffers when the shops are closed...
- gvjddbnvdrbv 6y agoReally? I'd have thought that stuff like financial, accounting and legal services (things the UK is good at) can be done via work from home rather better than e.g. car and machine parts manufacturing...
- wdb 6y agoYes, but all the restaurants (lunches), cafe shops (for their coffees during breaks), etc aren't frequented as much because everyone is working from home. Probably the more clientele in the employee's living neighbourhood doesn't equal it out. While I shop more at the local diary store I don't buy lunches etc.
- gvjddbnvdrbv 6y agoThe UK doesn't have a uniquely large number of restaurants and cafes, nor are the UK's cafes and restaurants uniquely affected by the lockdowns. When they say the UK has a strong service industry that drives exports etc they don't mean cafes and bars they mean financial, legal etc services. Those should have stayed strong. I suspect some of the decline is actually Brexit related decline in financial services.
- thu2111 6y agoBrexit has been in the works for years and the economy was growing before COVID. The obsession with blaming all misfortune on Brexit is tiring. The UK is hard hit because it went from a fairly moderate response to swinging hard into a deliberate policy of panicking the population as much as possible. The turning point was Imperial College / Ferguson predicting millions of deaths if there wasn't hard lockdown immediately. The UK's SAGE committee is largely responsible for the resulting devastation, including deaths: they literally told people they had a quasi-patriotic duty to stay away from hospitals. This is almost certainly why England is one of the few places in the world to report excess mortality amongst young adults. They have been opening and re-closing parts of the country with only hours of notice ... given on Twitter. Even Trump hasn't done that. They even used imagery straight from 28 Days Later: https://cdni0.trtworld.com/w960/h540/q75/76203_20200408T131310Z_1983511675_RC2C0G9UTL9W_RTRMADP_3_HEALTHCORONAVIRUSBRITAIN_1586368213731.JPG https://cdni0.trtworld.com/w960/h540/q75/76203_20200408T1313... This was largely a consequence of SAGE "experts" telling the government they had to deliberately create fear in the population. Is it any wonder the economy has been crushed when the government deliberately set out to make the population think COVID is the Rage virus?
- kingkawn 6y agoMoney still money
- LatteLazy 6y agoI'm not sure that's true given the current printing press outputs. And even if it is true, the link to official GDP figures is very weak. And even if it weren't, you only have half the GDP figures: we're down X now but we will be up Y when we re-open. If Y>X then we're laughing. And even if all this were not the case, what price a human life and is it a bad thing if for 6m people spend more time at home with their kids being happy but don't spend much? That's the issue here. One data point, of spurious accuracy, which we fully know and expect to be an outlier is being used to imply an economic trend and that trend is being extended to social trend. I could just as well say "the stock market is up so we are clearly fine"...
- OJFord 6y agoWell.. 'recession' is defined as two consecutive quarterly contractions in GDP. The argument (and I'm not taking a view) is that this is not a good measure for a year like this; that the consumer demand is there, but that the supply is artificially reduced or extinguished (in some sectors more than others). A proponent of this argument would say it's meaningless - or at least not helpful - to worry about two (or more) quarters of contraction, only to have them followed by stupendous 'growth' once everything's OK and the hibernating demand has somewhere to go. Someone more critical of it might say Well yes, 'or more', for how long can we hibernate?
- georgespencer 6y agoExcited for my second once in a lifetime economic correction!
- ChuckNorris89 6y agoOut of curiosity, why are you excited about this?
- PopeDotNinja 6y ago2009 happened.
- cjrp 6y agoThe 2008 recession was considered a "once-in-a-lifetime" event. it's ironic that we're now experiencing a second.
- leonroy 6y agoI imagine op is referring to 08-09 which was touted as the biggest economic crash since The Depression.
- chosenbreed37 6y agoMaybe they want to "buy the dip" and bet on a recovery. Or maybe they've been shorting UK Plc somehow :-)
- georgespencer 6y agoSorry, I was being facetious: my second once in a lifetime economic correction :)
- barrenko 6y agoI was born to a war, graduated to the 2008 recession, and now it's 2020. Still, excluding my parents generation, I consider myself very lucky.
- happymellon 6y ago
- Jestar342 6y agoBBC desperately trying to add some positivity to the headline. It's the worst recession on record, and yet they are clamouring onto this notion that it has been an achievement of success that it has been 11 years since the last recession.
- thu2111 6y agoBBC has been very pro-lockdown, pro-panic the whole time. Now they are seeing the results and trying to spin it positively, so less anger reflects back at them.
- logicchains 6y agoAn interesting thing about percentage change in GDP is it's worse on the downside than the upside. If GDP falls 40% one year, then rises 40% next year, it's not back at 100% of what it was before, it's actually only back to 84% (1.4 * 0.6).
- kenniskrag 6y agonot only for GDP but also for stocks. People assume if they loose 10% they need a 10% gain but that is not true: https://static.seekingalpha.com/uploads/2018/11/8/saupload_iwae-2.jpg https://static.seekingalpha.com/uploads/2018/11/8/saupload_i...
- parenthesis 6y agoEasy way to convince people of this: after a 50% fall you need to double (up 100%) to get back to where you started.
- kraghen 6y agoI sometimes wonder if using logarithms would be more appropriate in most cases. Then we can simply add up the numbers as one "would expect". We could choose the base to be ~2.7048138 such that 1% regular growth corresponds to 1% logarithmic growth. For low percentages they would mostly agree. But +40% would become +34% while -40% would become -51%, thus making the combined effect more apparent.
- barbegal 6y agoIt's one of the reasons why decibels and logarithmic scales are so useful. A drop of -2dB and a gain of +2dB gets you back to where you started.
- clement_b 6y agoWhat I find interesting, is that those who were betting on Brexit were probably doing so thinking it might be a little bit tough in the short term believing the UK will end up being stronger in the end. With such a massive recession already happening, and talks around Brexit going nowhere, they are really not going to have a nice next 5/10 years. I have just left the UK, several Europeans I know, working in tech, are doing the same. Not data backed, just personal experience. Maybe this is going to be even tougher than expected. Hopefully not.
- LatteLazy 6y agoCongrats on getting out!
- callamdelaney 6y ago> as coronavirus lockdown measures pushed the country officially into recession. This is nothing to do with brexit.
- maxehmookau 6y agoYes, but Brexit won't help the (now much more acutely needed) recovery.
- akmarinov 6y agoYep, this is the first punch from the Corona and the second punch will be beginning of next year when they end up with no deal. The sad thing is that everyone will say that Brexit went through great with no issues, it's the Coronavirus' fault that the economy is bad and is getting worse.
- peterclary 6y agoThings had already started looking very shaky even before Covid-19. City firms moving jobs abroad. Companies seeing orders drop off as EU buyers switched to sources that wouldn’t be affected if the UK left the transition period without a deal. Even with a deal, not being in the same customs union introduces issues that EU customers can avoid by switching suppliers.
- merrvk 6y agoWorst out of all of the G7
- monkeydreams 6y agoWorst out of all of the G7 so far. The US is still yet to manage its coronavirus problems and I suspect that the impact when the US finally manages to tackle this, it will dwarf anything the UK is dealing with.
- kgraves 6y agoThere is no hope for the UK, especially the disaster that is the UK tech industry. After the lockdown is over, people who reside there should get out while they can.
- throwewey 6y agoDisaster, could you elaborate?
- _Wintermute 6y agoNot sure the UK tech industry is a disaster, I left the UK for France following the Brexit result and it has really opened my eyes to how good it was in the UK.
- leonroy 6y agoMind weighing in on the pros and cons of your experiences in the UK vs France?
- MaxBarraclough 6y agoPlease expand on this. Are you referring to technical sloppiness, compensation, availability of jobs, something else?
- _Wintermute 6y agoI could write paragraphs on this but I'll keep it short, also bear in mind a lot of it will be due to specific workplaces and so on. There's some incredible French engineers, but I get the impression a lot of the talent is lost to the US, Canada and the UK. Compensation isn't too dissimilar to the UK or other western European countries. There's still a huge emphasis, especially in larger companies, on where you went to school - if you didn't study at a Grand Ecole you can get snubbed by a lot of people. France is also very conservative when it comes to technology, and often the French bureaucracy leaks into the workplace, I had to have multiple managers sign off my request form to get a HDMI cable.
- kgraves 6y ago
- maga20yes 6y agoIt's what people demanded. UK is still in semi-lockdown, with only 30% of office workers returning to the office. UK proposed a more relaxed approach at the start but backfired in the public opinion. Now, here's the arithmetic result of forcing people in their homes. Also, UK relies heavily on services, international business, students, tourism, all heavily hit, so that increases the pain of a travel and mobility freeze.
- barrenko 6y agoGDP as a measure is a scam.
- s_dev 6y agoSome models are useful, the map is never the territory etc.
- deleted 6y ago[deleted]