Signals flashing red
July 20th, 2010The chances of a double-dip recession are growing every day, and are now more than 50-50 likely. The ONS has just announced that the 2008-9 meltdown drained £22bn out of the economy, forced up unemployment by hundreds of thousands, and with a 6.4% slump in UK output was far worse than 5.3% in the Eurozone and 3.8% in the US. The 2.6% pre-budget growth forecast for 2011 was cut post-budget by the OBR to 2.3%, and now has been lowered further still by the IMF to just 2.1%. The faltering rise in UK output in the spring seems to have halted, and the rise in house prices has petered out or even fallen. The key engines of growth – household spending (even before the rise in VAT) and exports – are both down. So what is Osborne’s response? (more…)
