Half way there

So the economy shrank in the last quarter - one more three month period of zero or negative growth and we'll finally be able to call it a recession. Perhaps then the government might actually start doing something about it.

Not that they really need to - the Tories have been so pathetic that, at a time when they should be making gains in the polls, their lead is actually falling. But not only that, is a period of no growth or even a declining GDP such a bad thing?

It's supposed to indicate that living standards are improving, but it's not really accurate. Far more appropriate would be to measure GDP per capita. I'm not sure what the figures are, but with the huge influx of immigrants to our country over the last 10 years I wouldn't mind betting that GDP per capita has grown a lot lot slower than GDP over the last decade.

Much more important, in my opinion, than raw GDP are things like inflation, unemployment and manufacturing output. These are the real indicators of the economic health of a nation. Unfortunately, at least two of those indicators are heavily massaged to hide their real state - both inflation and unemployment are considerably higher than the official figures would have us believe.

I don't think this will actually be officially recognised as a recession. I think there will be a relatively modest bounce back to positive growth over the next quarter - helped by the run-up to Christmas - and the real recession will kick in next year. Contrary to reports which have claimed it will all be over by March 2009 I believe it will deepen and last well into next year and possibly beyond.

Of course, I'm no expert, but where have their predictions got us thus far? I'm planning to batten down the hatches for the next year and a bit - something that won't please the family Stan too much as they already think I'm a tight-fisted old git.

And forgive me for blowing my own trumpet a little, but, unlike our PM and former Chancellor, I have been genuinely prudent over the last 10 years. Even if house prices fall another 50% I'll still have plenty of equity in my home, I have a decent savings fund and very little debt besides the mortgage. My job is no more secure than anyone else - but I've got a back up plan which takes care of that should the need arise.

You see, I really did see all this coming - so I'm prepared. I hope you all are too.