Recessions and recoveries: a historical perspective (updated April 9, 2013)
Our monthly estimates of GDP suggest that output rose by 0.1 per cent in the three months ending in March, after a rise of 0.1 per cent in the three months ending in February 2013. While this suggests that the economy did not fall back into recession, it implies that the economy continued to stagnate in the first quarter of this year.
Over a longer perspective, this represents the slowest post-recession recovery in output in the past one hundred years; the economy was only ½ per cent larger in the first quarter of 2012 as it was in the third quarter of 2010. Indeed, per capita GDP - the simplest measure of the UK's overall economic prosperity - actually fell over this period; we do not expect it to regain its pre-recession peak until approximately 2018.
Looking forward, the focus should be on whether stagnation persists throughout 2013. NIESR’s latest quarterly forecast (published 5th February 2013) projects growth of 0.7 per cent per annum this year and 1.5 per cent in 2014. More detail on NIESR's latest quarterly forecast for the UK economy, published February 4, is here. Our comment on the 2013 Budget, and the OBR forecast, is here.