The increasing use of the word ‘recovery’ in the press during the recent financial crisis may have contributed to the UK’s eventual climb out of recession, new research from Emphasis has found.
This unique project – the second from the Emphasis Research Centre – began as a positive alternative to The Economist’s ‘R-word index’, which predicts economic downturns by tracking the use of the word ‘recession’. The research charts the use of the term ‘recovery’ (along with ‘green shoots’) in the British broadsheets during the recent recession and the months leading up to it. It reveals what appears to be a significant link between the number of press articles mentioning the word and climbs in both the FTSE 100 and Nationwide Consumer Confidence Index.
The sudden increase in the use of ‘recovery’ actually began long before any real sign of one existed. In fact, the UK was sliding further into recession and the markets were in freefall at the time. But the continued and ever-increasing reference to a tentative recovery may have helped precipitate a slight return to form, as both indexes began to rise slowly in February 2009.
Other factors undeniably played a part in renewed faith in the markets. The stimulus package announced in November 2008, the start of quantitative easing the following March, and the G20 summit in April 2009 are all likely to have influenced confidence. And mentions of ‘recovery’, though regular, were often far from positive.
Yet the apparent link between the rise in newspapers’ references to ‘recovery’ and the fluctuations in both the FTSE 100 and Consumer Confidence Index during the most intense periods of the economic crisis seem significant.
‘It could be that merely repeating the word “recovery”, like a mantra, somehow seeped into the subconscious of both the public and the market,’ says Rob Ashton, Chief Executive of Emphasis. ‘This may be an example of journalists creating the news as well as reporting it.’