Commentators were quick to dismiss the latest decline in the leading indicators index, which left it pointing unambiguously to a recession. But despite the apparent resilience of fourth-quarter GDP growth, it appears the economy is on the precipice of a recession and may already have fallen over the ledge. With consumption contracting sharply over the final couple of months of last year and the inadvertent fourth-quarter inventory build likely to be quickly reversed, we now forecast that first-quarter GDP will contract by 1.5% annualised.
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