Recession over but UK still suffering from 'depression', says NIESR

UK economic output remains well below its pre-recession peak, says National Institute of Economic and Social Research

The ‘recession’ may be over, but the ‘depression’ will last "some time" - forever.

the Guardian,

Tuesday 11 October 2011 16.02 BST

The UK recovery will be the weakest seen for almost a century, as the economy remains mired in "depression", a respected economic thinktank warned on Tuesday.

The National Institute of Economic and Social Research (NIESR) said the economic output in the UK still remained well below where it peaked before the downturn and so still had a long way to go to recover. The report comes after official data this morning showed a slip in manufacturing output, further dashing government hopes the sector could stoke a faltering recovery.

Publishing its monthly estimates on growth, NIESR said GDP rose 0.5% in the three months to September. That was a slight uptick from 0.4% growth in the three months to August but overall, it said, "UK economic growth over the past year has been anaemic".

"The level of GDP is still 4% below its pre-recession peak, suggesting that this recovery will be the weakest of any since the end of the first world war," it added.

NIESR predicts that what it calls a "period of depression" will continue for some time. It uses the term "recession" to mean a period when output is falling or receding, and "depression" to mean a period when output is depressed below its previous peak. "Thus, unless output turns down again, the recession is over, while the period of depression is likely to continue for some time," the thinktank said.