IoD reaction to GDP figures: “One L of a recovery”

Dated: 25 January 2011

Commenting on the latest GDP statistics, Graeme Leach, Chief Economist at the Institute of Directors, said:

“We are experiencing ‘one L of a recovery’ instead of the classical V shaped economic cycle. The IoD has long argued that the legacy of the financial crisis, anaemic money supply growth, the squeeze on real take-home pay and an already low savings ratio meant that quarter on quarter growth over the 2010-11 period was likely to weaken. Even allowing for weather related effects, 4th quarter growth was at best flat. Moreover, the idea that output will bounce back sharply in the 1st quarter of 2011, needs to be tempered by awareness of the VAT hike.

He added:

“The 4th quarter figures will have 2 immediate impacts. First, they are likely to result in GDP forecast downgrades for 2011 – the IoD is forecasting just 1.3 per cent growth this year. Second, talk of interest rate hikes will recede. The latest GDP and money supply figures make a strong case for a further extension in quantitative easing. We’re in for a rough ride”.

ENDS

Contact Points

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
Tel: +44 (0)20 7451 3392
Mob: +44 (0)7814 386 243
Email: edwin.morgan@iod.com
Website: www.iod.com/policy

Notes to editors

  • The IoD (Institute of Directors) was founded in 1903 and obtained a Royal Charter in 1906. The IoD is a non-party political organisation with upwards of 45,000 members in the United Kingdom and overseas. Membership includes directors from right across the business spectrum – from media to manufacturing, e-business to the public and voluntary sectors. Members include CEOs of large corporations as well as entrepreneurial directors of start-up companies.
  • The IoD offers a wide range of business services which include business centre facilities (including ten UK regional centres [three in London, Reading, Birmingham, Cardiff, Manchester, Nottingham, Edinburgh and Belfast] and one each in Paris and Brussels), conferences, networking events, virtual offices and hotdesking, issues-led guides and literature, as well as free access to business information and advisory services and a comprehensive Information Centre. The IoD places great emphasis on director development and has established a certified qualification for directors – Chartered Director – as well as running specific board-level and director-level training and individual career mentoring programmes.
  • In addition, the IoD provides an effective voice to represent the interests of its members to government and key opinion-formers at the highest levels. These include ministers, constituency MPs, Select Committee members and senior civil servants. IoD policies and views are actively promoted to the national, regional and trade media.
  • For further information, visit our website: www.iod.com
  • You can also keep up to date with the latest views from the IoD on twitter.com/The_IoD and at blogs.iod.com