A Flat-Lining Economy is Better than the Alternative

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A Flat-Lining Economy is Better than the Alternative

A Flat-Lining Economy is Better than the Alternative



Financial spread betting markets continue to take things in their stride and, so far this month, the indices have hovered around their highs despite what's been thrown at them.

Today will see some focus on the UK as we get the final reading of Q4 GDP data, which is expected to confirm the -0.3% contraction.

Assuming that there aren't any surprises, the UK market will then turn its attention to next month's first reading of Q1 GDP that should confirm whether or not we entered a triple digit recession.

Single, double or triple dip really doesn't matter in terms of the bigger picture, purely because it shows that the UK economy is flat-lining.

The word recession is almost irrelevant as we are neither growing nor contracting, but it makes a good headline that might sell a few more newspapers.

The main thing is that a flat-lining economy, whilst by no means ideal, is better than the alternative of prolonged deep contraction.

The real test going forward will be whether the labour market, which has proven to be remarkably resilient in the past couple of years, will remain buoyant.

There remain significant challenges for both the UK economy and the Eurozone as growth there is also struggling.

France has already seen some bad consumer confidence numbers this week and they have just released GDP data confirming their biggest fall in growth since 2009.

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By Angus Campbell, 27 March 2013


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