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Friday, 26 October, 2001, 10:32 GMT 11:32 UK
Analysis: How fit is the UK economy?
Woman at workbench
Manufacturers are shedding jobs, but the economy is still creating thousands more
Evan Davis

There seem to be two very different British economies - one that exists in statistics - buoyant, and resilient to world events; and another which businesses say they are experiencing, apparently diving towards recession.

It's hard to reconcile these conflicting pictures.

Is it that the statistics are wrong (it wouldn't be the first time), or that they are already out of date? After all, the data we get now at best covers September.

The growth figures from the Office for National Statistics are mainly a reflection of what was going on in July and August.

Evidence or anecdotes?

Or is it that the business anecdotes are unreliable - most news reporting focuses on businesses in trouble, like airlines or telecoms companies.

Who was there reporting that commercial vehicle production in Britain is over 50% up on a year ago? Car production too, is up (although note that it fell more recently from August to September).

In truth, the story of the economy probably lies between the most buoyant recent statistics, and the most depressed business sentiment.

Slowdown, but no recession

The British economy appears the most resilient of large countries in the developed world, but it is slowing down, with diverse industries feeling the hard times.

At the same time, some sectors are coping well. Low interest rates are keeping consumers spending, and there is no obvious reason for an imminent recession.

The bad news in the global economy - and the collapse in growth of world trade in particular - means the economy is not performing as it should be. Given the low interest rates, a roaring boom right now would be merited if it wasn't for all the shocks which we have suffered this year.

Right now, most forecasts of the economy - which are not a particularly reliable guide at uncertain times - foretell growth next year of around 2%.

If that IS as bad as it gets, we can be very content indeed.

See also:

26 Oct 01 | Business
UK growth surprisingly strong
26 Oct 01 | Business
UK 'will avoid recession'
22 Oct 01 | Business
UK economy outshines its peers
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