The worst of the recession may now be over, according to the Organisation for Economic Cooperation and Development, which said today that Britain is among a handful of countries which may be seeing a pause in its economic slowdown.
Releasing its monthly “composite leading indicator” (CLI) for the world’s major economies, the Paris-based watchdog pointed to “tentative” signs of a slower pace of decline in the UK, Italy, France and China, even though the world economy as a whole remained in deep recession.
The OECD’s leading indicators are a basket of economic data that in the past have had a good record of showing economic turning points.
“Weak though these signals are, they are present in the majority of the CLI component series for these countries,” the OECD said.
“In other major OECD economies the CLIs continue to point to deterioration in the business cycle, but at a decreasing rate. However, with the exception of China, where signs of a pause have also emerged, major non-OECD economies still face deteriorating conditions.”
There have been signs in Britain over the past month that some parts of the economy are getting worse at a slower pace than before, raising hopes that the 1.9% contraction in the economy in the first quarter may mark the worst point of the recession.
But the Bank of England and other major banks think the economy remains in a precarious state with bank lending still almost frozen. And although mortgage approvals and buyers’ enquiries for properties have picked up, prices continue to fall rapidly.
The OECD’s leading indicator for Britain rose by 0.3% in March, although was 5.4% lower than in March last year. France, Italy and China also enjoyed modest upturns in their CLIs.
Germany and Japan, though, which are big exporting countries heavily exposed to the weakness of the world economy, saw no such upturn in their leading indicators. Nor did Russia, the eurozone as a whole, or India.
Interestingly, the United States’s CLI also showed no signs of a trough, even though many economists think that the world’s number one economy could be the first to come out of recession.
