Tuesday, July 17, 2012

UK Growth downgraded to 0.2%

With the Olympics around the corner, there is hope that the UK may finally come out of the double dip recession this summer. However, the IMF have recently downgraded UK growth for 2012 to a miserly 0.2%, and the outlook still looks pretty grim. (By contrast the Office for Budget Responsibility, in March predicted 0.8 per cent growth for the UK over 2012, followed by 2 per cent in 2013.)



latest-economic-growth


A discussion of some of the different factors that have caused continued recession in the UK.
  1. Euro-crisis - uncertainty and recession in Eurozone affecting UK exports and investment levels in UK
  2. Bank Lending - Banks reluctance to lend to firms is stifling investment and economic recovery.
  3. Government spending cuts - Cuts in government spending have led to a fall in demand and also a subsequent fall in consumer spending.
  4. Global downturn. The UK is being affected by global economic slowdown. (though other parts of the world are still posting positive economic growth)
  5. Reduced real wages. Combination of real wage cuts and higher commodity inflation has squeezed disposable incomes in past few years.
  6. Weakness of housing market
  7. Low levels of UK consumer spending
  8. Government spending under Labour
Have your say at:

Government Spending Under Labour


Government spending under labour rose from 36% of GDP to 46% by 2008-09  - how much is that to blame for the UK's current economic woes?

Spanish CrisisUK growth may have been downgraded, but it is still possible to see how the UK can recover. Spain by contrast faces a real economic crisis, with seemingly no way out. Spain makes the UK look positively booming.


What EURO Economic Crisis?

A former chief German banker asks - is there really a crisis in the Eurozone? It's not just the UK where bankers can be out of touch. - What Euro crisis? Readers Questions

Spanish Unemployment

unemployment
The remorseless rise in Spanish Unemployment

1 comment:

Monty Pennington said...

The recession has been hard for everybody. My friend abroad has been feeling the pressure as the tax accountants in Perth advised him on his taxes.