FT Alphaville " Pasty-toting muppets Chart via Citigroup, bouncing off the latest UK GDP revisions downward (hat-tip Bond Vigilantes): (There is one bright spot: domestic final sales have been revised up. "That is the strongest domestic performance since Q1 2010," Nomura's Philip Rush says.) Here is more from Citi's Michael Saunders: In all, the level of real GDP is now 4.1% below its pre-recession peak, having been 3.9% below the peak on the prior data. This remains the weakest UK recession/recovery cycle of the last 100 years (excluding World Wars). Nominal GDP also remains weak, and well below the 5-5½% pace that would be considered normal for the UK and consistent with the inflation target over time. Nominal GDP at market prices (ie including the VAT hike) rose 2.8% YoY in Q4, while nominal GDP at basic prices (excludes the VAT hike) rose just 1.8% YoY. Having either run out of ideas or become inured to the above, members of the native political class did not appear to remark on this indictment of a wasted year in the economy very much. Indeed they spent Wednesday competing to debase themselves before the makers of "pasties," a regional food product recently subjected to a minor tax change. Via the Daily Telegraph: HM Treasury burbled something about Germany's growth not being very good either during the last quarter. On a related note, Britmouse points out that the government can, at any time and even without much trouble in Parliament, alter the definition of "price stability" which is used by the Bank of England to guide UK monetary policy. The Treasury could raise the inflation target from the current two per cent, or perhaps it could even introduce nominal GDP level targeting. But from Westminster, nothing. One politician did recommend that the public begin storing jerry cans of petrol in its garages though. While dangerous in itself, this measure will be very handy come the revolution. Related links: Why is their [US] recovery better than ours? - Adam Posen, BoE Economic review, March 2012 - Office of National Statistics This entry was posted by Joseph Cotterill on Wednesday, March 28th, 2012 at 15:58 and is filed under Capital markets. Tagged with bank of england, gdp, Monetary policy, NGDP, Nominal GDP, uk economy.