Outlook and appraisal [March 1992]

Love, Jim and Ashcroft, Brian and Brooks, Richard and Draper, Paul and Dunlop, Stewart and Leif, Kevin and Lockyer, Cliff and Malloy, Eleanor and McFarland, Mark and McGregor, Peter and McNicoll, Iain and McRory, Eric and Perman, Roger and Stevens, Jim and Swales, Kim and Yin, Ya Ping, Fraser of Allander Institute (1992) Outlook and appraisal [March 1992]. Quarterly Economic Commentary, 17 (3). pp. 1-2. ISSN 0306-7866

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This brief article provides an overview of the economic outlook based on the latest economic data. Economic prospects over the last quarter have not improved, and have shown signs of worsening in some areas. Recovery from the persistent and lengthy recession is unlikely to become apparent until the second half of this year. Provisional figures for the fourth quarter of last year indicate that UK gross domestic product fell by 0.3%. Unless subject to an unusually large upward revision, this means that non-oil GDP has fallen for six successive quarters, the longest recession since the Second World War. While still less deep overall than the 1979-81 recession, the extent of the present slump should not be underestimated. For example, in 1991 GDP declined by 2.5%, the largest decline in a single calendar year for sixty years. Investment spending has also been badly hit over the last year; capital expenditure by UK manufacturing industry fell by 15% in 1991, and was still declining in the final quarter of last year. The cumulative amount of outstanding consumer credit (excluding bank loans) has fallen every month from August last year to January, and retail sales are struggling to show any signs of upward movement.