Triple-dip recession looms for UK
Monday 28 Jan 2013 7:54 a.m.
By 3 News online staff and AP
Britain's economy contracted by a worse-than-expected 0.3 percent in the last three months of 2012, raising the possibility that it might fall back into recession for the third time since the global financial crisis.
Britain emerged from a nine-month recession in the third quarter, when GDP grew by 0.9 percent. But if the economy shrinks again in the first quarter of 2013, it will be officially back in a technical recession, defined as two consecutive quarters of economic contraction.
"They've had lots of austerity measures put into place by the Cameron government," 3 News business editor Michael Wilson said on Firstline this morning, "but it doesn't seem to be working in a sustained way."
The latest figure was worse than the market consensus of a contraction of 0.1 percent, and came just two days after the chief economist of the International Monetary Fund said it was time for the government to reassess its focus on spending cuts.
"The UK now, if it gets another negative figure, will actually be in a triple-dip recession, which for a developed country at this stage - they're pioneers in this, I think," says Mr Wilson.
"We're used to Greece and Spain - they've been stuck in recession - for some time, but the UK really is struggling."
The UK's problems contrasts with Germany, which is in a relatively good position.
"They have adopted a reasonably austere path, but they were starting off from a relatively bountiful position in terms of the strength of their economy, before going into the global financial crisis. Most of the news out of Germany is incredibly encouraging."
3 News / AP