Hey there peeps,

Early this week, the UK Prime minister informed the country that the Recession is over ……..

So the recession is officially over. After six straight quarters of negative growth, or 18 gloomy months of seeing our national output wither and contract, the economy has finally started to rise again.

Well a big fat genuine hooray for that.

But before you start pinning up the bunting, dancing in the streets and erecting statues to our glorious leader Gordon Brown, let’s take a closer look at what this actually means.

While the recession officially ended in the final quarter of 2009, it was a close run thing. The economy grew a pale and poxy 0.1% against the bright and rosy 0.4% anticipated by most economists. And that’s despite the Bank of England slicing the base rate almost to zero and printing £200 billion in a bid to move things along.

Only 40% of the data is in, so that 0.1% could be revised upwards in the months to come. Alternatively, it could be revised downwards, which would mean the recession isn’t actually over at all, and we’ll have even more to grumble about.
The recession may be over, but the economy is still much smaller than it used to be. Output has shrunk a mighty 6% since the credit crunch, so that 0.1% is just a spit in the ocean of loss.

And that is bad news for you and me. It means finding a job will still be hard. Wage rises will be flat or non-existent. Consumers will remain cautious. Mortgage lenders will keep LTVs low and SVRs high. Anybody with a bruised credit record will find it difficult to access finance. Happy days aren’t here again.

Until banks regain their appetite for lending, businesses will struggle to find affordable finance, further constraining economic growth.

Even if the recession is over, it won’t necessarily feel like it.

Until da next Tyme !