UK GDP down by 5.6% in the second quarter, bad but past the worst?

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UK Gross Domestic Product fell by 5.6% in the second quarter after 4.9% in the first quarter of the year. NIESR figures had suggested a deterioration in performance into the second half but the initial estimate of 5.2% fall was a little optimistic. The results are worse than expected.
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Keynes, fruit machines and the US recovery package, implications for the UK

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Keynes led us to believe the economy is like a fruit machine. Input the stimulus, pull the lever, the wheels spin and the jackpot of growth, falling unemployment and stable prices can be achieved.
Models of the economy and the econometrics within are now so sophisticated, given a set target for growth and jobs, the required stimulus can easily be estimated. Or are they?
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Government borrowing in June – £13 billion, fiscal stabilisers vicious in the cycle.

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Government borrowing in June was £13 billion compared to £7.5 billion in June 2008. In the first three months of the year public sector net borrowing was £41.2 billion. This is some £20 billion higher than in the same period of 2008/9 and £ 5 billion higher than the whole of 2007/8.
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Prospects for the US economy – in a deep U shaped recession

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The USA is in a long and protracted U shaped recession according to Nouriel Roubini Professor of Economics and Stern School of Business at NYU and Chairman of RGE Monitor. Roubini outlines the prospects for recovery by the end of the year and the risk of a W shaped recession for the US economy.
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