Official data showed the UK economy contracted 1.5 per cent in the last three months of 2008, the biggest quarterly slump in 28 years. The figures confirmed that Britain had entered its first recession since 1991. The figures, a preliminary official estimate of output, showed a contraction in services, manufacturing and construction.
But that 1.5% is much worse than it might sound. We’re used to hearing Seasonally Adjusted Annual Rates (SAAR). But this is a 1.5% decline in a 3 month period. In the US or South Africa, where GDP is reported on an SAAR basis, this would be equivalent to a 6% decline.
Sounds more serious now, doesn’t it?