Further demonstrating the inability of mainstream economists to correctly calculate the present, let alone predict the future, the UK Office of National Statistics reported an unexpected contraction of -0.4% GDP growth in the third quarter. This confounded widespread expectations of 0.2% growth and extends the length of the “recession” to six quarters, which is the longest continuous contraction since the 1950s. The news prompted Edmund Conway, the Economics Editor of The Telegraph, to declare the recession had just become a depression, while financial traders openly mocked the economists who had announced the onset of economic recovery over the summer.

In the Canary Wharf offices of BGC Partners, an international brokerage, Howard Wheeldon was pinned to his screen. Mr Wheeldon, a senior strategist, said: “For a few seconds, and that’s all, there was a stunned shock — to be followed by resignation. And then someone said, ‘Economists are no bloody good, are they?’ because so many of them had said the recession ended in the third quarter. The mood was one of resignation — plus the odd sneer to the effect that anyone who had thought the economy had come out of recession was living in cloud cuckoo land.”

You can safely expect similar “surprises” to take place in the United States and Europe over the next three quarters. The massive amount of stimulus and the statistical vagaries of GDP have temporarily disguised the amount of ongoing economic contraction, but they cannot hide it indefinitely. The UK media reports that many economists are hoping for a subsequent revision to the data that will retroactively make their forecasts less inaccurate.