UK Double-Dip Recession Deepens

26 July 2012 17:30 - Lucy Williams

    



UK Double-Dip Recession Deepens

The UK economy faces more struggles as the country’s double-dip recession unexpectedly deepened. Recently released data from the Office for National Statistics suggesting that the UK economy has contracted a further 0.7 percent in the latest quarter together with disappointing GDP figures indicates a struggling and stagnant UK economy and a bleak future ahead. Chancellor George Osborne stated that the UK had “deep-rooted economic problems” adding that it was difficult for the UK having to deal with “debts at home and the debt crisis abroad”.

The fall in the economy’s output was much more than forecasted by economic analysts. Output was initially expected to fall by just 0.2 percent. Osborne and his austerity programme have been criticised for flatlining the economy and creating a deepening recession. Celebrations surrounding the Queen’s diamond jubilee have been considered partly responsible for the decline in output and gross domestic product growth due to a working day being removed from the quarter. The recent poor weather is also considered to have affected construction activity and growth. It has been predicted that the Bank of England will cut interest rates.

Economists are optimistically expecting a 0.5 percent boost in the third quarter as output makes its normal gains following the effects of the diamond jubilee. Additionally the Olympic games should support the UK economy by providing another possibly 0.2 percent.

UK currency has been hit by the weak figures losing 0.3 percent against the US dollar, hitting fresh 12-day lows, and 0.8 percent to the euro.

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Related Links :
Office for National Statistics - Official Website

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