Friday 23 October 2009

UK economy stays in recession

So, whereas the French and German economies have come out of the recession, the UK economy stayed firmly in recession in the third quarter with a contraction of 0.4 per cent.

This is particularly bad, because most experts had forecast that we would come out of recession, with perhaps a 0.2 per cent growth.

It is now six quarters of consecutive negative GDP growth – the first time this has happened since records began to be collected by the Office of National Statistics (ONS) in 1955.

The fact that other major European economies, plus Japan, have come out of the recession while the UK remains firmly in it, makes you wonder about PM Gordon Brown’s comments in September 2008: “…at root our economy is better placed to weather the global storm than it was in the seventies, the eighties and the nineties".

Three weeks ago the Prime Minister said: “We are now coming out of recession as a result of the actions that we have taken. I think you will see figures pretty soon that show the action that Britain has taken yielding effect.” Expect him to take a battering in the Commons in the next few days.

Upon release of the figures the pound fell more than a cent against the US dollar, as traders displayed concern that the UK may be left as the only major economy still in recession.

Despite stimulus measures taken by the government and the Bank of England, the economic decline has continued.

David Kern, chief economist at the British Chambers of Commerce, said: “Continued intervention - including help for businesses to access finance, and incentives to promote investment - is still needed. Above all else, business confidence must be nurtured, to ensure that recovery is not further delayed."

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