Snow `would help prevent double-dip recession'

A white Christmas could stave off a return to recession, economist tells MPs.

A member of the independent Office for Budget Responsibility (OBR) has said that heavy snow this month would help avert the prospect of a double-dip recession.

Professor Stephen Nickell was appearing in front of MPs from the Treasury Select Committee to discuss last week’s Autumn Statement.

He said: “If we have a huge bout of snow that will probably rule out a double-dip recession because GDP will fall in the fourth quarter and then bounce back in the first quarter [of 2012].”

But time is running out for that to happen, although snow has fallen in Scotland, Northern Ireland and the north of England.

The OBR forecast a dip of 0.1% in the final quarter of this year but 0.1% growth in the first quarter of 2012.

The definition of a recession is two successive quarters of negative growth.

The OBR was heavily criticised by the Committee for its forecasting record. It dramatically revised its growth projections last month from its March forecast. “It’s just guessing, isn’t it?” Conservative Michael Fallon asked the three OBR members present.

OBR head Robert Chote defended the office’s record, saying the economic recovery from the last recession had been much weaker than it had thought in March.

Chancellor George Osborne faces the Committee today.

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