Some people on Twitter believe almost every government action is a conspiracy to hide something else. I don’t always buy that, but the latest theory doing the rounds has some merit.
At midnight tonight, the First Quarter of the year ends. The UK is already in danger of falling into recession and the OECD is predicting it.
UK GDP fell by 0.3% in the fourth quarter of last year. Technically, two quarters of contraction in a row means a recession.
We already know the UK economy is stagnant and sick. We know that Osborne’s “most pro-growth budget ever” didn’t work. So a technical recession will make little material difference. But the political implications will be huge.
So could the government prevent a recession in such a way? I suppose that will require finding out how much extra money people have spent in panic-buying, and determining whether it will be significant enough to make a significant difference.
But its worth keeping in mind that this also increases the chance of a downturn in Q2.
It isn’t a far-fetched idea to assume Osborne will do almost anything to avoid a technical recession now and save himself for another slew of bad headlines.
I’d be interested in seeing the actual numbers though. Anyone have them?
Update: 0.1% of quarterly GDP would be around £375 million. So to get a 0.2% boost in GDP numbers, consumers would have to spend around £800 million extra over the last few days. Seems a bit of a stretch.
(hat-tip to @DuncanWeldon and @MartynWilliams2, who has also expanded on this in the comments)
Update 2: Actually, this is very unlikely for reasons I didn’t take into account.
As Will Straw points out, most oil is imported. So stock depletion of oil counts against consumer boost. Plus, the provisional figures for GDP will exclude last minute panic buying and will be the ones the media focuses on.
So the chance of this happening? Very slim