financial forecast
Uncertainity clouds the future Adrian Crichton, a director at Weatherbys Bank, takes a look at the past performance of the UK economy, explains how difficult it is to take a view on the likely future and predicts a further strengthening of sterling
I
t is difficult to remember a time when there has been more uncertainty about the direction of the key economic indicators. Perhaps this is why so much has been written in the press recently, trying to make sense of the likely course of economy. In 2008, the talk was all about uncharted
waters, meaning that, in a lifetime, we had not experienced a similar set of extreme circumstances. Well now, two years on, a sense of normality may have returned, but the direction of travel remains a mystery. We may have discovered the map, but many don’t really know which way up to hold it. Take economic growth, for example. After
the recession of 2008 and 2009, when the economy contracted by some six per cent, we saw a return to modest growth at the end of 2009 and through most of 2010, before GDP fell by a further half per cent in the fourth quarter. Was this a blip or does it signal the beginning of a “double dip” recession?
Quarterly UK GDP Growth Rate 2008-2010 1.00%
0.00% Q1 Q2 Q3
-1.00%
Q4
-2.00%
-3.00%
2008
2009
2010
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