Narnia Strikes Back
January 25, 2011
Bad news for the Coalition and my own personal economic judgement today, as the economy contracts by 0.5%. It’s a little too easy to blame this on the snowy weather entirely, but it’s worth bearing in mind that one of the biggest factors in this contraction was business services and finance. The impact of the snow on this sector wasn’t necessarily so much about reduced spending because of the snow, but also involved the City boys with nice Home Counties pads not being able to get into work, after SouthEastern shut down much of its service. Delays in trading for perhaps several weeks would necessarily cost the economy millions – it’ll be interesting to see how much of that comes forward into Q1 2011.
It’s worth pointing out that manufacturing continues to increase – I would say that alone implies that the current financial strategy is working. However, if we have two quarters of consecutive contraction, I’ll be proven wrong.