Was January's cold weather enough to derail the economic recovery?
Filed under: Financial Crisis
What is it about the British and chilly weather? Why does the whole country stop the moment a snowflake falls?Manufacturing slumped at the start of the year and everyone has blamed the weather. But even though other countries like Germany and the US also had unusually cold starts to the year and lots of snow, their economic recovery won't be derailed by a snowflake or two...
Will January's snow and ice nip the UK's nascent recovery from recession in the bud? Gordon Brown will hope not.
The weather argument does not really hold any, errr, ice anyway, says Professor Andrew Clare of Cass Business School, who is also chairman of Fathom Financial Consulting.
Take other countries across Europe and the US. They also had a colder-than-usual start to the year. When you compare the January temperatures across the UK, US, France and Germany with the average January temperature over the past 15 years, it turns out that Germany experienced the most unseasonably cold January this year. January 2010 was nearly 10% colder than German Januarys over the last 15 years.
But guess what - industrial production rose in Germany, France and the US in January. In the UK, however, it experienced its steepest drop in six months, even though our January was less chilly than elsewhere.
"It might be that this is just more evidence of the inability of the British to cope with cold weather, and evidence of their tendency to take snow days' at the first sign of a snowflake," says Clare.
"Alternatively it could be a more worrying sign. Perhaps the UK's recovery has faltered already – even though the weak pound has made UK exports more competitive."
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