As the weak manufacturing and industrial data yesterday suggests the UK might face a triple-dip recession markets appear unphased. Reporter Tim Wallace:
The spurt of market activity comes despite new fears that the UK is in a triple-dip recession, after downbeat manufacturing and production figures were published yesterday.
One source close to the RBS share sale said: “Companies are looking to take advantage of a market that has stormed ahead without any meaningful cause, especially if they need to replenish their capital base.”
Despite the weak economic outlook the FTSE 100 closed at 6,510.62, up 0.11 per cent on the day and at its highest level since 2008.
But a focus on the possibility of a triple-dip might not be sensible:
In reality whilst a triple dip would no doubt generate many headlines, the difference between a Q1 GDP figure -0.1 per cent and one of +0.1 per cent is pretty unimportant, especially as the figures are subject to revision for years afterwards.
The bigger picture is that the UK’s recent economic performance has been disastrous.
Against a backdrop of terrible growth, no rebalancing, a living standards squeeze, a weak labour market and productivity falls, the difference between a small contraction in Q1 and some small growth in Q1 doesn’t seem very important.