This recession just became a depression

It is difficult to know what to be most shocked by in the gross domestic product figures published by the Office for National Statistics this morning: the fact that we are in the longest-lasting deepest continuous recession in recorded history or that no-one in the City foresaw it*.

Leaving aside the City's failings, with which we are intimately familiar, the scale of the economic collapse is disturbing. The National Institute for Economic and Social Research has been calling this a “depression” rather than a recession for some time – these figures surely now underline such a description.

A brief look at the figures beneath the headline figure of a 0.4pc fall reveals that almost all parts of the economy – from industry and manufacturing to services to construction to transport suffered significant contractions. Only the government managed to keep its economic output from falling, stagnating during the quarter thanks to extra health spending (swine flu-related I wonder?).

The GDP fall, as you may have seen elsewhere, means that this is now the longest technical recession since at least 1955 (and most probably since the 1930s, though the ONS doesn't have figures on this) at six quarters, or a year and a half, long. The late 1970s/early 1980s slump was deeper, but was not a long uninterrupted period of economic output falls.

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