Tuesday, 30 June 2009

Will Spin save us, or kill us?

The UK economy contracted 2.4% in the first quarter of 2009, a decline not exceeded in 51 years, according to the latest official data.

The decline was more severe than the earlier estimate of a 1.9% fall, and worse than analyst expectations.  The Office for National Statistics (ONS) blamed the sharp revision primarily on weaker output in the construction and manufacturing sectors and highlighted the dire state of economy.  New data on the service sector also showed the sharpest quarterly decline in output on record, and whilst the UK consumer has often been said to be surprisingly resilient in this recession, today we learned that consumer spending in the first quarter suffered the sharpest fall in decades.

Are they telling us something we don't know, I don't think so ... has anything significant actually changed, I don't think so ... hence it will continue to get much worse, ... but will Spin 'help us', or 'kill us' (e.g. delay addressing the real problems and causing an even bigger crisis in a year or two?)  .... take a look around, and have a guess, noting house asset price inflation is mainly about 'spinning' a feeling of confidence so people will go borrow/spend again ...