Bank of England policymaker Martin Weale believes the UK is currently in stagnation rather than recession, with the eurozone the biggest uncertainty for markets.
Speaking in the Birmingham Mail yesterday, Weale said the squeeze on household spending through rises in fuel prices is coming to an end, leaving the eurozone as the major concern.
He said: “The economy is stagnating but I have not heard people say this is a disaster.
“For quite a long period now, we have had slight upward movement and slight downward movement. Rather than describe it as a double-dip recession, I would describe it as a sustained period of stagnation.”
GDP in the UK contracted by 0.7 per cent between April and June, marking the third consecutive quarter of contraction. A recession is defined as two consecutive quarters of negative growth.