UK is back in recession, OECD says Source:Guardian

 

The OECD says UK output will decline 0.4% in the first three months of 2012 on an annualised basis

 

The UK is heading back into recession and will be among the slowest of the world's largest economies to recover in the first half of this year, according to a study by the Paris-based thinktank, the OECD.

 

Only Italy will struggle over a longer period to return to growth, highlighting the difficult situation confronting the British government as it battles to boost confidence and get the economy back on track.

 

In recent weeks surveys have shown the business and consumer sentiment falling back after an initial boost earlier this year.

 

The Office for National Statistics added to the gloomy prognosis for the economy on Wednesday when it reported a bigger fall in output in the final three months of 2011 than first estimated. It said a previous 0.2% drop in output had underestimated the size of the fall, which further analysis found to be 0.3%.

 

The OECD, which produces quarterly figures showing year-on-year growth, said that UK output declined at an annual rate of 1.2% in the final quarter of 2011 and will decline at an annual rate of 0.4% in the first three months of 2012.

 

The OECD also warned that the eurozone remained in a fragile state and would struggle to grow for the rest of the year.

 

Germany and France will race ahead of the UK in the first half of the year but are forecast to slow down as the year ends.

 

Consumer and business confidence surveys of the eurozone on Thursday showed a decline that economists described as a blow to hopes of a recovery during 2012.

 

Sentiment was mixed among individual countries in March. Confidence suffered a relapse in Germany and Spain, while it picked up slightly in France and Italy.

 

The OECD has criticised Brussels for its failure to build a sufficient firewall of guarantees and insurances to protect against a sovereign collapse.

 

In a report last week the OECD said the EU should commit at least €1 trillion to safeguard Italy, Spain, Portugal and Ireland against collapse after Brussels put forward plans that limited the rescue fund to €700bn (£580bn).

 

One of the worst hit industries in the UK is construction, which is a traditional driver of growth after a recession but has barely recovered from the crash.

 

Balfour Beatty, one of the UK's largest building firms, said it needs to make cuts among its 12,000 services staff.

 

It warned that reduced public sector spending on infrastructure and maintenance coupled with low levels of commercial property development were hitting profit margins.

 

Hundreds of construction firms and architecture practices are known to have laid off staff after a rehiring programme in 2010.

 

Unemployment in the UK has risen for the last year, in contrast to the US, which has maintained several large scale public spending programmes to promote employment and maintain consumer and business confidence.

 

The US economy is expected to grow at 2.9% in the first quarter and maintain that level of growth through the summer months, according to the OECD.

 

 

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News that will come as not surprise to anyone, the UK economy is back in recession. Who'd have thought that austerity wouldn't work? OH WAIT.

 

The biggest revelation from that article is that Obama's refusal to cut spending has paid off and the economy that started this mess is well on it's way to full health. It begs the question of what if the EU had condemned the Austerity approach. Would the EU debt crisis be as much of a crisis? Would it have gotten that far beyond Greece? Or had we paid off Greece's short term debt (within 5yrs) and turned it into long term debt (25yrs) then helped their economy recover and reform would we even be in this mess at all?

 

America and Australia are the two best performing western economies. The latter obviously has a primary sector that is growing at a rate that is unrivalled by anyone but both had governments who refused to cut spending and actually encouraged growth. Sure Rudd got mocked for his $900 cheques to everyone, but they bloody worked.

But then the US government has for example always traditionally spent less as a proportion of GDP than the UK government. In 2010 for example it was about 39% whilst here it was 45%, so it's easier not to cut as they were spending less in any case. However that doesn't effect the psychological effect of the cuts which in reality haven't even started yet as we're still spending 47%.

But then the US governm example it wasent has always traditionally spent less as a proportion of GDP than the Uk government. In 2010 for example it was about 39% whilst here it was 45%, so it's easier not to cut as they were spending less in any case. However that doesn't effect the psychological effect of the cuts which in reality haven't even started yet as we're still spending 47%.

Christ I hate this argument. It's not about how much we spend as a proportion of GDP - it's about our discretionary spending (i.e. how much of the spending the government can actually control). It's little comfort to a public that we've had loads of spending cuts but we're spending more than before purely because we're spending so much more on unemployment benefit, just as it would be little comfort to a public if we'd had massive spending cuts but a gouged GDP meaning we were technically spending more as a proportion of GDP!

Im useless with financial and economic stuff.

How bad is this recession compared to others, and how long did it take for those ones to recover?

This one just feels like we're never going to get out of it!

When will the world realise that austerity is never the way forward. Hollande in France BETTER win the election, then you will see big growth there.

 

Typical tories. You just don't cut during economic crisis- cut steadily along with progressive taxation when the economy is 'booming'. And in the end it's the chancellor at fault- so a big bad no for Mr. Osbourne.

Im useless with financial and economic stuff.

How bad is this recession compared to others, and how long did it take for those ones to recover?

This one just feels like we're never going to get out of it!

We were out of recession for a while but the economy was stagnant at best. Now we have fallen back into recession after a considerable time of threatening to do so. This is a direct result of the economic policy pursued by the government.

 

Each recession is different. A recovery in Europe is vital for us right now as they are our biggest trade partner, short of a miraculous change in economic policy by Osbourne and Camoron.

Im useless with financial and economic stuff.

How bad is this recession compared to others, and how long did it take for those ones to recover?

This one just feels like we're never going to get out of it!

The last recession lasted three months longer than the previous few. Even allowing for that the pace of recovery is a lot slower than in the past. I don't know when the last double-dip recession (going back into recession before recovering from the last one) was.

When will the world realise that austerity is never the way forward. Hollande in France BETTER win the election, then you will see big growth there.

 

Typical tories. You just don't cut during economic crisis- cut steadily along with progressive taxation when the economy is 'booming'. And in the end it's the chancellor at fault- so a big bad no for Mr. Osbourne.

 

Didn't you say you were considering voting Tory?

Didn't you say you were considering voting Tory?

I think the last week has put everything into perspective.

I think the last week has put everything into perspective.

 

I think I've been telling everyone this for the past two years almost.... Once you've lived through a Tory Government, you kind of see the CON-servatives for what they are (the clue is in the name..)... Now maybe you young uns will listen to us oldies who had to suffer these tossers back in the 1980s.... Leopards dont change their spots.... ;)

I think I've been telling everyone this for the past two years almost.... Once you've lived through a Tory Government, you kind of see the CON-servatives for what they are (the clue is in the name..)... Now maybe you young uns will listen to us oldies who had to suffer these tossers back in the 1980s.... Leopards dont change their spots.... ;)

 

Not all of us fell for it so easily :P

More encouragingly, manufacturing is up which may well avert another fall this quarter.

Wow, none of us saw this coming at all! I'm absolutely, completely, indescribably surprised :o

Been confirmed this morning.

 

The UK economy has returned to recession, official figures have shown.

 

The economy shrank by 0.2% in the first three months of 2012, the Office for National Statistics (ONS) said. This followed contraction of 0.3% in the last three months of 2011.

 

The ONS said there was a sharp 3% fall in construction output, the biggest fall for three years, adding that it had double-checked the figures.

 

A recession is defined as two consecutive quarters of contraction.

 

Wednesday's figure is the preliminary estimate from the ONS, based on only about 40% of the information that will be used to reach later figures.

 

The figure is subject to further revisions.

 

The ONS said output of the production industries decreased by 0.4%, construction decreased by 3%, and output of the service sector increased by 0.1%.

 

Joe Grice, chief economic adviser to the ONS, said that an increase in fuel buying came at the end of the quarter.

 

But he said there was "no reason to suppose [there were]any special factors... in these figures".

 

Source: BBC News

That's a huge slump for construction! The government needs to forget this austerity shit and crack on with investing in capital projects. Up north the SNP government are doing what they can to invest in capital projects and trying to keep our economy from stalling but there is so little we can do because Westminster controls all the strings and there just isn't that much room in the falling Scottish budget. If anything this is strengthening Salmonds case for home rule, we NEED more control because as a country Scotland did not vote for austerity we voted for growth and continued spending in the short term with cuts in the long run when our economy was stabilised.

The Tories really have screwed the economy up (yet again), I just despair really.

Also overall UK debt level is at 66% of GDP (a record HIGH) and £1tn (also a record HIGH)

 

 

So much for reductions....

For the last four years the government have been saying that the recession which began in 2008 was entirely the fault of the Labour government. Not a single penny of the contraction was due to the world economy. Now, somehow, this renewed recession is nothing to do with the government at all, Cameron and Osbourne's policies have not been responsible in any way at all for a single penny of the contraction.

 

Governments often take us for idiots but this really does take the biscuit. Not that most people can afford biscuits any more of course.

Austerity DOESN'T work. Hollande's socialists will prove this in France I tell ya.

 

Austerity AND a fall in economic growth makes everything worse. Debt at record levels (how very tory) and inflation high so people will feel the squeeze enough without austerity. Economic growth should be priority over balancing the books (which the Tories aren't even managing)...