Belfast Telegraph

Saturday 23 August 2014

Triple-dip recession looms after dire January

David Cameron
David Cameron

A dire month for manufacturers after output slid by 1.5% during a snow-hit January has deepened the UK's triple-dip recession fears.

The latest gloomy figures from the Office for National Statistics (ONS) put further pressure on the pound, which declined to a new two-and-a-half-year low of 1.48 against the US dollar.

The UK economy contracted by a worse-than-expected 0.3% at the end of 2012 and will return to recession with another decline in the current quarter.

The manufacturing decline, which followed signs of improvement in December, meant overall industrial output dropped by 1.2% in January, dashing City hopes of a better performance over the month.

Other factors behind the fall included closing the Schiehallion oil platform, which drove a 4.3% slide in oil and gas output.

While it is still possible that the services sector could rescue the UK economy in this quarter, the figures increase the pressure on the Bank of England to boost stimulus measures next month.

Most City experts believe there will be more quantitative easing this spring with interest rates at a record low for another two years.

Further signs that UK exporters are finding life tough emerged in separate figures on the UK's trade and goods deficit, which narrowed to £2.4bn in January from £2.8 bn the previous month.

Prime Minister David Cameron's official spokesman said: "I think what you are seeing in recent data releases is that, as the Prime Minister was explaining recently in his speech, we remain in a difficult economic period."

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Comment

More

Company Profiles

More

Help & Advice

More

People on the move

More