Posted January 18, 201213 yr Britain 'back in recession': economists http://news.smh.com.au/breaking-news-world...0116-1q2io.html Britain is likely to already be in recession, according to two highly regarded economic forecasters, as developments in the eurozone paralyse the country's recovery. The Ernst & Young ITEM Club and the Centre for Economics and Business Research (CEBR) both believe that gross domestic product (GDP) shrank in the final quarter of last year and will fall again in the first three months of 2012. A recession is defined as two consecutive quarters of contracting output. The prospects for the economy in Britain are closely tied to the fate of the eurozone, according to both reports, which is hitting the export trade so crucial to the country's recovery. The warnings come shortly after France, the second biggest economy in the eurozone, saw its triple-A credit rating downgraded by Standard & Poor's (S&P) in a move which signals more troubles for the single currency bloc. Professor Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club, said: "Figures for the last quarter of 2011 and the first quarter of this year are likely to show that we are back in recession and we are going to have to wait until this summer before there are any signs of improvement. But it's not going to be a repeat of 2009 - we are not going to see a serious double dip." The ITEM Club report forecasts GDP growth of just 0.2 per cent this year before increasing to 1.8 per cent in 2013 and 2.8 per cent in 2014. The ITEM Club said deteriorating levels of confidence will see business investment stagnate in 2012, while export prospects have already slowed. However, the group said British companies have stronger balance sheets than in 2009 and have built up large cash stockpiles, which will provide a useful insurance policy if the situation deteriorates further. The ITEM Club forecasts that investment fell by 2.6 per cent in 2011 and will grow by just 0.4 per cent in 2012, while unemployment will approach three million, representing 9.3 per cent of the UK's labour force. Prof Spencer added: "The only piece of good news for UK households is that inflation should fall back below 2 per cent this year, as commodity prices weaken and the VAT rise drops out of the calculation." The forecaster said exports accounted for most of last year's growth, adding 0.9 percentage points to GDP in 2011, but with weakening demand from the Eurozone and concerns over China's ability to soft land their economy, the outlook for 2012 looks much less promising. Meanwhile, CEBR revised down its forecast for growth for 2012 as a whole from 0.7 per cent growth as predicted last October to a decline of 0.4 per cent with a risk of a more serious decline of 1.1 per cent if developments in the eurozone are worse than feared. Douglas McWilliams, one of the report's authors and chief executive of CEBR, said: "We take no pleasure in outlining such a bleak forecast. But the world is going through a fundamental change where previously poor economies are industrialising fast." S&P stripped France of its gold-plated triple-A credit rating on Friday, and also lowered the long-term ratings on Austria, Malta, Slovakia, and Slovenia, by one notch. The rating levels for Cyprus, Italy, Portugal and Spain were dropped two notches. There was no change for Belgium, Estonia, Finland, Germany, Ireland, Luxembourg and the Netherlands. A Treasury spokeswoman said: "The uncertainty in the euro area continues to have a chilling effect on the UK as well as elsewhere, but there are reasons to be optimistic: business surveys showed the UK service and construction sectors strengthening at the end of 2011, and the government's credible fiscal plan is helping keep UK interest rates at record lows." ----------------------------------------------------------------------------- Right, so, what's Gideon's excuse going to be this time do you think.....?
January 18, 201213 yr It was too warm??? These ratings agencies are causing a fair chunk of the EU problem right now. Well that and Germany's refusal to let the ECB be the lender of last resort. It would be lovely if both could get the hell over themselves. As for the UK being back in recession, that is something any half educated person with an inch of common sense saw coming the second the Tory's got power and the second someone who is economically illiterate was made chancellor. There is no way that the Eurozone crisis is going to get better any time soon, the ratings agencies will reappear every quarter as progress is being made and downgrade the less than stable parts and keep encouraging their bond interest rates to soar to the point where America will literally bankrupt the Eurozone. By that time of course, UK growth is at something like -25% thanks to more austerity measures nobody wanted being pushed through against the wishes of the entire country. By 2014 all Alex Salmond is going to have to put on his Indie campaign posters, is "No more Tory's". It'd sail through.
January 18, 201213 yr Author It was too warm??? These ratings agencies are causing a fair chunk of the EU problem right now. Well that and Germany's refusal to let the ECB be the lender of last resort. It would be lovely if both could get the hell over themselves. As for the UK being back in recession, that is something any half educated person with an inch of common sense saw coming the second the Tory's got power and the second someone who is economically illiterate was made chancellor. There is no way that the Eurozone crisis is going to get better any time soon, the ratings agencies will reappear every quarter as progress is being made and downgrade the less than stable parts and keep encouraging their bond interest rates to soar to the point where America will literally bankrupt the Eurozone. By that time of course, UK growth is at something like -25% thanks to more austerity measures nobody wanted being pushed through against the wishes of the entire country. By 2014 all Alex Salmond is going to have to put on his Indie campaign posters, is "No more Tory's". It'd sail through. Couldn't agree more... Ca-Moron and Gideon are basically putting pressure on Salmond to call a referendum early because they know damn fine that by 2014, the economy will be so f/ucked, there will be so much unemployment and the real consequences of "austerity" will be there for anyone to see, and they'll realise that the voices of opposition to all this crap were correct all along... There wont be the need for a third question..... Or, arguably, even a second one.... :lol:
January 18, 201213 yr Right, so, what's Gideon's excuse going to be this time do you think.....? It's Wikipedia's fault for closing for 24 hours.
January 18, 201213 yr Right, so, what's Gideon's excuse going to be this time do you think.....? Adele hasn't released another album yet?
January 18, 201213 yr :lol: :lol: :lol: Have to admit that was slightly stolen from Mock the Week - "last quarter Britain's economy grew by 0.1%, and that was only because of Adele" :lol:
January 19, 201213 yr Since when did a chancellor need to be economically literate to have strings attached to his limbs?
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