It had been widely expected that despite an end of year slump in 2011, Britain would avoid a double-dip recession as a result of the economy growing within the first three months of last year.
However, yesterday’s announcement that the British economy had contracted by 0.3 percent during the final quarter of 2011stoked fears that the economy could once again slip into recession.
These fears will be extended following the OECD’s figures, with the Paris based group expecting economic output to fall at an annual rate of -0.4% during this first quarter; which will officially see the UK slip back into recession following two consecutive months of negative growth.
The news will come as a blow to the Chancellor, George Osborne, who in his budget speech last week predicted that the economy would avoid slipping into recession.
During his speech last Wednesday, the Chancellor announced that the Office for Budget Responsibility had estimated the UK would be in positive growth within the first quarter of 2012 – with the final growth being predicted as 0.8 percent in 2012, 2 percent in 2013, 2.7 percent in 2013 and in 2015 and 2016 3 percent.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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