(By Richard Holway 6.00pm 26th Apr 09) Thanks for the kind words many of you expressed on my Review of The Budget. You will remember that I started the piece thus:In Feb 08 I had a stand up argument with Brad Holmes of Forrester when he forecast IT would return to double-digit growth in 2009 and 2010. (see IT forecasts - Holway’s Rant) Well, I felt exactly the same anger when I heard Alistair Darling declare that growth would return to the UK economy in the last quarter of 2009 and would amazingly grow at 3.5% in 2011 and beyond. This from a man who also got every forecast he has made as Chancellor totally wrong.
This is a forecast as dangerous for the economy as the Forrester forecast might have been for IT companies. If you believe either you would make the wrong decisions - or more precisely, you won't make the hard ‘survival-type’ decisions at all.
I have to admit that I thought I’d have to wait a bit longer before Darling was shown to be wrong – yet again. But it only took 72 hours. On Friday the ONS released figures showing that GDP contracted by 1.9% in Q1 – that compares with 1.6% estimated by Darling. It makes Darlings estimate of a contraction of ‘just’ 3.5% for 2009 look unattainable. Forecasters are saying that 4%+ is now more likely.
Many of you also commented on my article U on 13th Apr 09 – when I suggested that confidence had hit a low point and that we were now in for a ’very long bottom’ before we saw the first signs of a up-tick in the 2nd part of 2010. I still hold to that.
But I was amused by Jon Moulton (see my post Gloomy moi? On 24th Apr 09) on the Today programme on Friday. Moulton said that the downturn this time was ‘L-shaped’. Given the shape of the Letter L above, I think I’d now prefer to use an ‘L’ than a ‘U’ too!
When Moulton was asked how long it would take before signs of recovery were seen, he said “an L of a long time…”.
I have to admit that I thought I’d have to wait a bit longer before Darling was shown to be wrong – yet again. But it only took 72 hours. On Friday the ONS released figures showing that GDP contracted by 1.9% in Q1 – that compares with 1.6% estimated by Darling. It makes Darlings estimate of a contraction of ‘just’ 3.5% for 2009 look unattainable. Forecasters are saying that 4%+ is now more likely.
Many of you also commented on my article U on 13th Apr 09 – when I suggested that confidence had hit a low point and that we were now in for a ’very long bottom’ before we saw the first signs of a up-tick in the 2nd part of 2010. I still hold to that.
But I was amused by Jon Moulton (see my post Gloomy moi? On 24th Apr 09) on the Today programme on Friday. Moulton said that the downturn this time was ‘L-shaped’. Given the shape of the Letter L above, I think I’d now prefer to use an ‘L’ than a ‘U’ too!
When Moulton was asked how long it would take before signs of recovery were seen, he said “an L of a long time…”.
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