Despite the seemingly never-ending austerity measures, the UK has sunk further into a recession and official figures suggest that the latest financial crisis is worse than the country suffered during the 1970s.
The consensus of opinion is that the Office for National Statistics revealed that Britain is slumped in a contracting economy for the third quarter in a row, sparking fears that it may not be as easy to climb out of as originally hoped.
The second quarter of 2012 was hampered by the Jubilee celebrations and economists have suggested that the amount of time the nation took off work, combined with the bank holidays, could have seriously put a dent in the recovery. The unseasonably cold and record wet weather has also put a dampener on many businesses, with consumers preferring to stay at home. Many experts are pinning their hopes on the Olympics helping to boost a flagging high street and believe the flood of tourist money may be enough to trigger a mini-revival.
Gross domestic product is one of the main ways growth or contraction is measured in an economy. At the beginning of 2012, many had suggested the UK would register small but significant growth during the year, but many have revised their predictions to flat at best, with some expecting to see further contraction. The average estimate for the second quarter is shrinkage of around 0.1%, according to results collated by Consensus Forecasts. However, some economists believe the contraction could be as much as 0.3%.
If the predictions are correct, it will be another blow for the Chancellor, George Osborne, who had based the deficit calculations on the assumption that economic growth would recover rapidly. There has already been speculation that some senior Tories are pushing for a job swap, between William Hague and George Osborne, as a means of allowing the Chancellor to gracefully step aside from a plan which has failed, without losing too much face.
The double-dip recession during the 70s lasted just two quarters and if the latest results are as people expect, Britain will officially be in a worse position now than they were nearly 40 years ago. Apart from the current situation, the only double dip recession since the war occurred in 1973. At that time, the price of oil had risen sharply, triggered by a crisis in the Middle East. The situation was made even worse by a series of miners’ strikes, which led to a severe shortage of power in the UK, forcing firms to work just three days a week to conserve energy.
That situation seems almost impossible to contemplate in modern society, yet Britain is on the verge of suffering an even more severe double dip recession.
It is therefore not surprising to learn that in the UK, some-one is declared either bankrupt or insolvent every four and a half minutes, whilst 1,694 workers get made redundant every day. These kinds of statistics reveal the true picture of how ordinary Brits are struggling to cope with the economic downturn.
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