OECD Predict UK Recession
29 March 2012 14:00 - Jack Stupple

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OECD Predict UK Recession

The Organisation for Economic Co-operation and Development has said that the UK economy shrank in the first quarter of 2012 and as a result the country is officially back in recession. The OECD said output fell 0.1% which would mean two consecutive quarters of economic contraction – technically classed as a recession. They warned that Britain’s economy contracted 0.4% in the first quarter of this year and that the Eurozone crisis was a key risk for the UK economy, as they called for the firewall to be increased in size to help prevent the crisis worsening.

The OECD also said that not only is the UK in recession but it will be among the slowest of the world’s largest economies to recover in the first half of this year. They said that Germany and France, would race ahead of the UK in the first half of this year. The OECD warned that the Eurozone remained fragile and it would continue to struggle to grow for the rest of 2012.

Yesterday the Office for National Statistics said that the economy shrank more than expected at 0.3% in the last quarter of 2011. This meant growth was just 0.7% for the whole year.

This will undoubtedly be a major knock for the Chancellor particularly as in last week’s budge George Osborne predicted that the economy would grow 0.8% this year, 2% in 2013, 2.7% in 2014 and 3% in 2015 and 2016, backed by The Office for Budget Responsibility.