On Wednesday the British economy flatlined. Despite a weak growth of 0.5% for Q1 of 2011 the economy flatlined. This is to say that the contraction of Q4 for 2010 was more or less equalised by Q1’s figures.
The maths for this is as follows: 100 x 0.995 x 1.005 = 99.9975. It’s actually a slight contraction of 0.0025%, which is as good a 0% growth. Now to explain the maths. 100 is the constant. 0.995 is the result for Q4 2010. 1.005 is the result for Q1 2011. One then multiplies it together to get the average, which gives one what the economy is actually doing.
What is the economy doing?
As a whole it is doing nothing. It’s not growing but nor is it contracting. It’s just existing. Stagnating if you will. The individual sectors are doing things. The business services and finance increased by 1%, transport and…
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