All economic statistics are iffy, and growth figures are the iffyest. There is no doubt that we have been through the deepest and longest recession since the Second World War, but are we really out of it now? Yes, says the Office of National Statistics (ONS), delivering a message their political masters will love to hear – there's an election looming, after all. The UK economy actually expanded over the last quarter of 2009. Not by much – 0.1% – but as they used to say in black-and-white films, 'That's your story, boys!' And the story is 'Recession over – official.'
Maybe it is, but a 0.1% statistic hardly proves it. Economists measure growth by comparing output at the start of the period with output at the end of it. Both figures can be wrong, so the difference between them can be doubly wrong. It is hard enough trying to measure growth over quarter of a decade, never mind quarter of a year. And 0.1% is well within the possible error. Quite possibly, the economy actually shrank again.
Additionally, the calculations are done on sampling, rather than measuring the whole economy. You would need to be a statistical superhero to measure everything, particularly most businesses probably will not know exactly how they did last quarter until all the bills are settled and the spreadsheets are made up at the end of January, or beyond. So again, big mistakes are possible.
Even if the ONS guess is correct, we are not necessarily out of the recession woods. The £175bn of new money that the Bank of England created must have done something to stimulate business – though no more, it seems than to keep its nose above water. Now that this stimulus has come to an end, business might just slip under again. Don't trust any economist – nor statistician – who says they know for sure.
