Belfast Telegraph

Saturday 10 October 2015

UK came near a double dip as crisis was worse than thought


Published 28/06/2013

The UK narrowly avoided a double dip recession at the end of 2011 and beginning of 2012, according to revised figures from the Office for National Statistics.

However, the recession after the financial crisis was more severe than originally thought.

Gross domestic product (GDP) is now estimated to have plunged by 7.2% immediately after the financial crisis, as opposed to the ONS's previous estimate of 6.3%, following its annual revision of Britain's economic data.

News that the economy didn't contract in the first three months of 2012 will provide some relief to George Osborne, although it didn't grow either. Output remained flat, and the economy is still in a far from robust state. The economy is expected to grow slightly in the first three months of 2013 – the ONS predicts 0.3% compared with the previous quarter, but its year-on-year growth estimate has been halved to 0.3%.

UK disposable income slumped 1.7% in the same quarter – the biggest fall since 1987 – and business investment also fell sharply, by 1.9% quarter-on-quarter to £27.3bn. The steeper 2008/09 recession means the economy is now even further behind its pre-crisis level, says the ONS.

Vicky Redwood, chief UK economist at consultancy Capital Economics, said: "Of course, more relevant are the timelier indications that the economy has continued to gather momentum in the last few weeks.

"However, the detail on first quarter 2013 GDP provides further reason to be cautious about assuming a strong recovery is getting under way."

She added that incoming Bank of England governor Mark Carney may still need to take action to boost the economy after he takes the helm next Monday.

There is slightly better news for the second quarter, with GDP forecasted to grow by 0.5%.

From the web

Sponsored Videos

Your Comments

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?

Read More

From Belfast Telegraph