Looking for the green shoots of recovery now looks more like clutching at straws. Over the past few weeks economic commentators have been making much of the indicators that seem to suggest that recovery is about to start: clothing sales have risen strongly (but this has been fuelled by fine weather and heavy discounting); mortgage approvals in June were the highest since March 2008; and the FTSE index has risen for ten trading sessions in a row.
All of this came crashing to earth with the release of figures showing that output shrank more than expected in the past quarter and that GDP has fallen by 5.7% since peaking in the first quarter of 2008.
The National Institute of Economic and Social Research expects growth of only 1% in 2010 and warns that it will be the autumn of 2012 before the economy is back to the size that it was at the start of 2008. In terms of living standards we will not be back at 2008 levels until 2014.
How does that fit in with your long term business plans?
Oh well, Stella is down to £8 per case at Sainsburys. How desperate can you get?