IOD: GDP drop due to 'unwinding of the Olympic effect'

The chief economist at the Institute of Directors, Graeme Leach, said that the end of the Olympics obscured the fact that the economy is flat - not shrinking:

You can’t see the road ahead through the rear view mirror. The GDP fall was largely attributable to the unwinding of the Olympic effect and so the underlying story is that output is flat.

The critical factor is not what the GDP figures did in Q4 [fourth quarter of 2012] but what the broad money supply figures will do in Q1 [first quarter of 2013].

If the recent slight pick-up in money supply growth can be sustained, the UK economic outlook in 2013 will be better than people expect. So hold back on the doom and gloom.

– Graeme Leach, Institute of Directors Chief Economist