George Osborne will be sickened by this morning's news of a 0.3% contraction in the last quarter of 2012. When you consider the effect a fortnight of snowy paralysis will have on Q1 2013, it'll be astonishing if we don't get two consecutive quarters worth and a third technical recession.
I'm sceptical of the notion that this is a problem which can be seen off by a bit more borrowing and a tax cut here or there, certainly not if Britain tries to do it alone. If there is anything more pointless than blogging about the economy, it's pumping money into it at a time when your biggest trading partners are all battening down the hatches. You might as well try and blow up a balloon with a hole in it (this is the John Lanchester approach, and finds favour with those who like to criticise Osborne without the inconvenience of having a plausible alternative).
At a time when growth seems to be flagging everywhere, there is no sum available to HMG big enough to make a blind bit of difference to the economy. Europe is in deep trouble, Chinese growth is faltering and the only reason the US isn't as deeply in the mire is because President Obama has resolutely avoided confronting America's enormous debts. Too many countries (both at government and citizen level) owe too much money and all of them are trying to deleverage at the same time. No wonder demand is flat.
At some point the politicians are going to have to devise a kind of Global New Deal, a mixture of inflation (which quickly erodes the true value of debt), QE, debt write-offs and extra spending by surplus countries to boost demand and confidence.
Things will have to get a lot worse before this happens. In the Cadiz area of Spain, where I hope to be going for my summer holidays, unemployment is at about 40%. Worse then even than this.
