Size Matters.

Recently there has been a widely-disputed debate about whether the global economy is still in the midst of a recession or if we have already seen the worst of the storm. Like anything, it depends who you ask. A key fundamental behind a market economy, is the feelings and confidence of consumers. The hype surrounding the easing of the recession, is likely to be a combination of truth mixed with a sense of hope.

UK economy is 'still not growing'

An article published on the BBC News website, illustrated how "contrary to expectations, the UK economy did not grow in the third quarter of the year" and this could be attributed to a "failure in registering growth in weak industrial activity". The article was written primarily from an unbiased viewpoint and gave little away in terms of the writers opinion. Instead the focus was fundamentally facts and quotes giving credit to the opinion of the 'Chief Secretary to the Treasury' amongst others. The article uses two primary sources to reflect the evidence presented. The first source mentioned is the 'National Institute of Economic and Social Research' or NIESR. The second source that is referenced is the 'Office for National Statistics' or ONS. Whilst these seem to be fairly reputable sources, I would have enjoyed reading the article more had their been not necessarily 'author bias' but atleast some sort of opinion or perspective on the facts and information that was being presented.

The NIESR calculated that from July to September 2009 there was an unchanged GDP within the UK. This didn't correspond to economist predictions that there would be a level of growth that would effectively signal the end of the recession in the UK. The NIESR went a step further by commenting that "predictions were less likely to be accurate than usual because of the current disturbed economic circumstances". These reports add further speculation as to when the UK economy will follow France, Germany and Japan out of the recession. To further portray this cautionary viewpoint, the article mentions how the ONS announced on the 6th October 2009, that the UK's industrial output had unexpectedly fallen 2.5% during the month of August from the previous few months. This information is relevant as "GDP figures are given prominence as a recession is generally shown by two consecutive quarters when the economic output is contracting".

UK Economy Already Out of Recession

There are however reports that attempt to portray a rather 'brighter' picture of the current economic situation. 'FinFacts' is a website that reveals global financial news. From the articles that I reviewed on the website, it seems to be the sort of media outlet which tries to impress with the use of large quotations, numerous statistics and complicated looking graphs.
The start of the article begins in a brash and convincing fashion, "UK consumer confidence rose to the highest level in more than a year in August as evidence mounts that the economy is emerging from the worst recession in a generation". The main source used in the article is the 'Nationwide Building Society'. To further emphasise this positive sentiment the source highlights a quote in italics from a senior offical, the Nationwide's 'Chief Economist':

"The moderate increase in confidence this month indicates that, for the first time since April, consumers are beginning to feel more positive, not only about the future, but also about the present situation. The rise in positive sentiment across all indices is no surprise as a number of key economic indicators continue to show that we may have reached the bottom of the current recessionary cycle".

I was rather sceptical when I read this article as it seems as though there is an underlying motive behind it's publication and didn't seem to possess a level of objectivity. In my opinion, the article seems to target investors or industry-related professionals as it constantly attempts to persuade and re-assure it's readers that things aren't as bad as they seem. With this in mind, I was not as receptive to the information presented as I was in the first article.

There appears to be a lack of cohesion or synergy between the information presented in the first and second article. In the first article, it clearly states that "GDP remained unchanged from July to September". However in the second article, it mentions that "the UK economy returned to growth in the three months ending August as it rose 0.2%, following a 0.3% decline in the three months to July". What was interesting was that both sources quoted statistics from the NIESR.

In order to get an objective and coherent indication on the validity of these sets of information, it would be most beneficial for the reader of these articles to use a third source and determine which is closer to the truth.


Websites Read:
http://news.bbc.co.uk/1/hi/business/8292958.stm

http://www.finfacts.com/irishfinancenews/article_1017849.shtml