17 August 2009
It ain't over 'til it's over
Japan today declared that it has emerged from the recession with its first quarter of growth for over a year.
This statement follows last week's announcement that Germany and France have also returned to growth. These are significant announcements considering that the Japanese economy is second only to the US, while Germany and France are the biggest in Europe.
Nevertheless, the news has received a cool response, particularly in the UK. Japan's success has been announced on the same day that a report was issued from the Prince's Trust and the University of Sheffield. It stated that if UK trends are in line with the 1980's recession, one in five young people collecting their GCSE results next week could be on the dole by the time they are 21.
Chief economist at the manufacturers organisation the EEF, Stephen Radley, believes that there is room for optimism, but the Government needs to move away from a slash and burn mentality. While a quick fix approach might generate positive headlines, it does not leave us any better off in the long term.
However, as Radley notes, exports increasingly show great potential. On the back of a weaker Pound the UK could reap the benefits, especially if three of the biggest global economies really are returning to growth. While the consequences will almost certainly have a positive impact on the UK, whether this will be enough to stimulate a fast recovery remains to be seen.
Author
Chris Shaw
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