Britain Heading for Recession
24/10/2008
After months of forecasts and speculation, official data has revealed that the UK economy shrank by 0.5% between July and September, putting the country in high danger of a recession.
The technical description of a recession is two successive quarters of negative growth, but the government and the Bank of England are in agreement that positive growth in the current quarter is highly unlikely.
This is the first time in 16 years that Britain has experienced negative growth. The figures - which are worse than expected - also represent the biggest GDP decline since the last quarter of 1990.
The Prime Minister's spokesman said: "Clearly, as the Chancellor has said and the Prime Minister said earlier in the week, these are very difficult times for the global economy.
"In the past year we have seen two unprecedented shocks - the first credit crunch since the 1930s and a record surge in food and energy prices ... The Prime Minister recognises that household budgets are being squeezed by high oil and food prices and we are seeing the impact of that on discretionary spending as people tighten their belts."
The technical description of a recession is two successive quarters of negative growth, but the government and the Bank of England are in agreement that positive growth in the current quarter is highly unlikely.
This is the first time in 16 years that Britain has experienced negative growth. The figures - which are worse than expected - also represent the biggest GDP decline since the last quarter of 1990.
The Prime Minister's spokesman said: "Clearly, as the Chancellor has said and the Prime Minister said earlier in the week, these are very difficult times for the global economy.
"In the past year we have seen two unprecedented shocks - the first credit crunch since the 1930s and a record surge in food and energy prices ... The Prime Minister recognises that household budgets are being squeezed by high oil and food prices and we are seeing the impact of that on discretionary spending as people tighten their belts."
