Blog: Olly WehringRecession and the self-fulfilling prophecy

Olly Wehring | 26 January 2009

Well, there it is. The UK has officially followed Ireland into the gloomy depths of recession, after the economy's worst quarterly performance for around three decades.

Gross domestic product slipped by 1.5% in the final quarter of 2008, making it two consecutive quarters of decline and so fulfilling the generally accepted criteria for a full-on recession.

On the face of it, there are significant reasons to feel glum here in the UK. Drinks taxes are rising, sales are under pressure, particularly in the on-trade, jobs are on the line and a weak sterling is pushing up prices on all imports. Plus, it's January, which over here, means that the weather is even more dreary than usual.

Bizarrely, however, the sky is still in place.

So, before we descend into the throes of depression, let's attempt to keep a bit of context amid the economic turmoil.

According to a recent poll, the British are the most pessimistic around when it comes to talking about the economic downturn. Much as the British deride the French for their latin-esque drama tantrums, the UK can moan with the best of them.

One industry bod told me the other day that a prolonged slump is in danger of becoming a "self-fulfilling prophecy".

This is not to belittle in any way the people who are losing their jobs or the businesses that are struggling. No one is denying the seriousness of the situation. However, rather than a doomsday scenario, this is a case of battening down the hatches with whatever comes to hand and waiting for the storm to pass.

And it will pass, even if 2009 disappears into a blackhole.


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