Tuesday, January 26, 2010

It's all over!

Britain moved out of recession today. Well, UK output rose 0.1% in the last quarter, which given the margin of error of these kinds of estimates might not even mean that the recession has formally ended. But, assuming this isn't a quirk of the figures of a temporary revival (inventory bounce etc), it's good news.  

Unless policymakers suddenly decide that it's time to worry about inflation and public debt, we might get a proper recovery back to where the economy's capacity could take us (ie 10% higher output than we got in 2009 - which of course in practice shrinks the deficit more than any of the spending cuts being discussed).