Recovery is not always smooth

There has been huge media attention about the 2011 Q2 UK GDP growth figures released today. The estimate of 0.2 per cent shows only very weak growth. It is bound to be revised either up or down as more information comes to light. But at the moment, recovery looks very weak, after more rapid growth in previous quarters.

But recovery paths are rarely smooth. The charts below show what happened after the recessions of the early 1980s and 1990s. Recovery is erratic on a quarter by quarter basis. Just before the economy was about to launch into the boom of the mid/late 1980s, for example, there was a fall in output in 1984Q2. This caused panic in government circles at the time, a panic which proved wholly unwarranted