Earlier this week we provided a reality check on the recovery and raised the very real possibilty of a doubled-dip recession. Well it turns out that we and most of the rest of the economics profession were some way off the mark in thinking that the UK economy had returned to growth in the third quarter.
Today's GDP release from National Statistics showed that the economy continued to contract by 0.4% in the three months to September against our expectation of 0.1% growth (consensus 0.2%). There's relatively little detail in the first cut of data - but it does suggest that no sector of the economy reported growth for the fourth quarter running.
The bigger question is what happens next? As we pointed out this week stimulus measures will start to run out at the end of the year. It looks like the economy could still be pretty fragile and there are no signs, as yet, that the economy will have much momentum on its own. The prospect of conditions really turning around in the early part of next year is starting to look a bit more remote. This makes it more likely that more QE and stimulus could well be on the way.
It'll be a while yet before the headlines call the end of the recession. Mervyn King, earlier this week paraphrased Churchill describing the financial crisis
"Never in the field of financial endeavour has so much money been owed by so few to so many."
He might want to add another Churchill quote
"Now this is not the end. It's not even the beginning of the end."