OK, I admit it; I'm playing around with the numbers.
The preliminary GDP estimate for the first quarter shows a drop of 1.9 percent relative to the last quarter of 2008. Annualize that number (which means you multiply it by four) and you end up with a GDP fall of 7.6 percent. The UK has now been in recession for a year. The credit boom isn't looking so clever now.
As the economic slowdown accelerates, there is nothing that the Bank of England or the government can do. UK policy makers managed to contrive the fastest slowdown in a generation while interest rates were close to zero and the fiscal deficit was in excess of 7 percent of GDP.
If anyone wanted proof of the futility of Keynesian economics, the UK provided an excellent test this year. Likewise, if anyone wanted to learn about the limits of monetary policy, they need look no further than at the MPC's rate decisions since August 2007.Of course, things would have been so much worse if they hadn't acted!
UK economic policy reminds me of a line from a song. I have forgotten the title of the song, but the line, which contains a series of shocking double negatives is:
"Nothing I do don't seem to work; it only seems to make matters worse."