Fraser of Allander Institute: Economic Commentary [November 2011]

Fraser of Allander Institute

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    Abstract


    In the June Commentary we stressed that the Scottish economy was threatened with stagnation as the rate of recovery slows. This threat is even more real today than it was then. Growth has continued to weaken in the global economy and is weaker in the UK and Scottish economies too. The UK economy has effectively stagnated over the last year, growing by only 0.5%. In Scotland growth was flat between April and June and business surveys suggest continuing weakness in the third quarter. The UK has recovered more strongly than Scotland, by nearly 3% compared to around 1% to 2% in Scotland, even though the recovery is weak overall. There is little comfort in the latest GDP data for both Scotland and the UK. This is underlined by the latest US real GDP figures which reveal an annualised growth rate of 2.5% for the third quarter of this year. Growth in the US is still weak by the standards of previous recoveries and insufficient to make much of a dent in the high levels of unemployment. Yet, it is notable that with the latest quarter's results, GDP in the US economy moved back above its pre-recession peak output, whereas the UK and Scotland are still - in the second quarter - 5% and 4%, respectively, below their pre-recession GDP. It will not go unnoticed that, unlike the UK, the US has only recently adopted an austerity programme, which has yet to kick in. We therefore welcome the Bank of England's decision to undertake a further expansion of the money stock throu gh quantitative easing and note that there is still scope for some fiscal easing without damaging our fiscal credibility in the long-term.
    Original languageEnglish
    Place of PublicationGlasgow
    PublisherUniversity of Strathclyde
    Number of pages78
    Volume35
    Publication statusPublished - 30 Nov 2011

    Publication series

    NameFraser of Allander Institute Economic Commentary
    PublisherUniversity of Strathclyde
    No.2
    Volume35
    ISSN (Electronic)2046-5378

    Fingerprint

    Economics
    Scotland
    Recession
    Fiscal
    Business survey
    Global economy
    Unemployment
    US economy
    Bank of England
    Credibility
    Threat
    Quantitative easing
    Stagnation
    Real GDP

    Keywords

    • labour market trends
    • Scotland
    • Scottish economcs
    • economic forecasting

    Cite this

    Fraser of Allander Institute (2011). Fraser of Allander Institute: Economic Commentary [November 2011]. (Fraser of Allander Institute Economic Commentary; Vol. 35, No. 2). Glasgow: University of Strathclyde.
    Fraser of Allander Institute. / Fraser of Allander Institute : Economic Commentary [November 2011]. Glasgow : University of Strathclyde, 2011. 78 p. (Fraser of Allander Institute Economic Commentary; 2).
    @book{26ddd16ad45545a59eda58bfb2217593,
    title = "Fraser of Allander Institute: Economic Commentary [November 2011]",
    abstract = "In the June Commentary we stressed that the Scottish economy was threatened with stagnation as the rate of recovery slows. This threat is even more real today than it was then. Growth has continued to weaken in the global economy and is weaker in the UK and Scottish economies too. The UK economy has effectively stagnated over the last year, growing by only 0.5{\%}. In Scotland growth was flat between April and June and business surveys suggest continuing weakness in the third quarter. The UK has recovered more strongly than Scotland, by nearly 3{\%} compared to around 1{\%} to 2{\%} in Scotland, even though the recovery is weak overall. There is little comfort in the latest GDP data for both Scotland and the UK. This is underlined by the latest US real GDP figures which reveal an annualised growth rate of 2.5{\%} for the third quarter of this year. Growth in the US is still weak by the standards of previous recoveries and insufficient to make much of a dent in the high levels of unemployment. Yet, it is notable that with the latest quarter's results, GDP in the US economy moved back above its pre-recession peak output, whereas the UK and Scotland are still - in the second quarter - 5{\%} and 4{\%}, respectively, below their pre-recession GDP. It will not go unnoticed that, unlike the UK, the US has only recently adopted an austerity programme, which has yet to kick in. We therefore welcome the Bank of England's decision to undertake a further expansion of the money stock throu gh quantitative easing and note that there is still scope for some fiscal easing without damaging our fiscal credibility in the long-term.",
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    Fraser of Allander Institute 2011, Fraser of Allander Institute: Economic Commentary [November 2011]. Fraser of Allander Institute Economic Commentary, no. 2, vol. 35, vol. 35, University of Strathclyde, Glasgow.

    Fraser of Allander Institute : Economic Commentary [November 2011]. / Fraser of Allander Institute.

    Glasgow : University of Strathclyde, 2011. 78 p. (Fraser of Allander Institute Economic Commentary; Vol. 35, No. 2).

    Research output: Book/ReportOther report

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    AB - In the June Commentary we stressed that the Scottish economy was threatened with stagnation as the rate of recovery slows. This threat is even more real today than it was then. Growth has continued to weaken in the global economy and is weaker in the UK and Scottish economies too. The UK economy has effectively stagnated over the last year, growing by only 0.5%. In Scotland growth was flat between April and June and business surveys suggest continuing weakness in the third quarter. The UK has recovered more strongly than Scotland, by nearly 3% compared to around 1% to 2% in Scotland, even though the recovery is weak overall. There is little comfort in the latest GDP data for both Scotland and the UK. This is underlined by the latest US real GDP figures which reveal an annualised growth rate of 2.5% for the third quarter of this year. Growth in the US is still weak by the standards of previous recoveries and insufficient to make much of a dent in the high levels of unemployment. Yet, it is notable that with the latest quarter's results, GDP in the US economy moved back above its pre-recession peak output, whereas the UK and Scotland are still - in the second quarter - 5% and 4%, respectively, below their pre-recession GDP. It will not go unnoticed that, unlike the UK, the US has only recently adopted an austerity programme, which has yet to kick in. We therefore welcome the Bank of England's decision to undertake a further expansion of the money stock throu gh quantitative easing and note that there is still scope for some fiscal easing without damaging our fiscal credibility in the long-term.

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    Fraser of Allander Institute. Fraser of Allander Institute: Economic Commentary [November 2011]. Glasgow: University of Strathclyde, 2011. 78 p. (Fraser of Allander Institute Economic Commentary; 2).