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According to Ashley Seager in The Guardian 'it was always fanciful to expect we might be in what is known as a "V-shaped" recession, where we tumble quickly in and then bounce back out.' The latest eonomic perfomance figures from around the world make grim reading; 'Japan - the world's second largest economy - reported last week that its gross domestic product had shrunk by 3.3% in the fourth quarter of 2008. That is the equivalent of 13% over a 12-month period... The eurozone's biggest economy, Germany, is suffering the same problem as Japan and China in that it cannot export anything to a world economy in which demand has collapsed. The credit crunch is giving way to a manufacturing crunch - and it's deepening. There was also grim news from the United States with figures showing industrial production down 10% year-on-year in January. Car production in the world's largest economy is now a staggering 50% lower than a year ago. And housing starts there have fallen to a new low, suggesting the three-year-old housing downturn is far from over.'
The UK recession is “not yet clearly worse” than other postwar downturns, although there is still a “strong case” for a further easing of monetary policy, according to a member of the Bank of England’s rate setting committee. Andrew Sentance, a member of the Monetary Policy Committee, said “the global financial crisis and synchronised global downturn” were “producing a recession which is relatively severe compared to past precedents – but not yet clearly worse than the mid-1970s and early 1980s downturns in output”. But Mr Sentance also admitted that monetary policy was unable to prevent recessions.“If there is a general lesson for monetary policymakers from this financial crisis and the resulting recession, it is a sense of humility,” he said. “Like the bankers, we are not the masters of the universe either.”
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