Media speculation about a double-dip recession must not become a self-fulfilling prophecy

By Jonathan Isaby

Last week's GDP figures were clearly disappointing and unsurprisingly gained massive coverage across the print and broadcast, with the following day's papers in particular hinting at the danger of a double dip recession.

Yet yesterday, whilst the closure of a Pfizer plant in Kent received not insignificant coverage on the broadcast media (despite events in Egypt still dominating the agenda), there was virtually no coverage of some very good news on manufacturing.

The Press Association recorded:

Manufacturing figures have offered some economic relief after new data showed activity growing at its fastest pace since records began 19 years ago. The Chartered Institute of Purchasing & Supply's (CIPS) manufacturing activity index, where a reading over 50 indicates growth, surged to a better-than-expected 62 in January from an upwardly revised 58.7 in December.

Higher demand in the UK and overseas sent the reading to its all-time high, while the figures also revealed record growth for new orders and employment. CIPS chief executive David Noble said the data provided the "much-needed kick-start to 2011" after last week's shock news that the economy contracted by 0.5% in the final quarter of 2010.

That's the thing: the media's natural tendency is to give greater prominence to bad news over good news - but when we're dealing with the economy, there's a serious danger that negativity breeds further negativity and talk of doom becomes a self-fulfilling prophecy.

My point is backed up by the ComRes poll released last night for ITV News. Conducted after the publication of the GDP figures, it found:

• 52% of the public believe that the UK is on course for another wave of recession - up from 38% when asked the same question in October (17% don't believe there will be a double dip - compared to 24% in October)
• 48% believe that the Government has lost control of the economy (29% believe that the Government is in control)
• Asked whether they think things are generally heading in the right direction, 48% said no, up from 32% when asked in October - compared to 28% saying they think things are heading in the right direction, down from 41% in October.

I don't think anyone doubts that the next few years are going to be challenging, as we get to grips with the economy after Labour's years of profligate spending and borrowing.

But as yesterday's manufacturing figures show, it's not all bad news and it is vital that the media report economic news responsibly, rather than scare-mongering to the point that the country talks itself into a double-dip recession. And needless to say, the same goes for opposition politicians.