Can Reeves save our frozen economy from a recession?

Jack Frost swept an icy chill across the UK economy earlier than anyone expected. Following on from last week’s grim economic news, the Office for National Statistics (ONS) has revised its third quarter (July to September) estimate of GDP growth down to absolute zero.

- JAMES MOORE

It wasn’t exactly looking warm and fuzzy when the bean counters made their first stab at the number: a tepid 0.1 per cent growth. But now we have learned that the service sector did worse than had been thought, and while construction showed a little life, manufacturing contracted. As if that wasn’t enough, the second (April to June) quarter was also revised down from growth of 0.5 per cent to 0.4 per cent.

I was initially nervous about using the r-word: recession. You must have two consecutive quarters in negative territory to satisfy the criteria. But with another zero expected for the current quarter, the UK is teetering on the brink. Another downward revision to the third quarter – perfectly possible – combined with the fourth undershooting the current (low) expectations and the box will be ticked. Some economists believe we are already there.