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Economists warn UK faces triple-dip recession

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The UK could be set for a triple-dip recession once the benefits of the London Olympics wear off, economists have warned.

They fear that the eurozone crisis could push the country back into recession as soon as spring 2013, fuelled by a Greek exit early next year.

Schroders chief economist Azad Zangana believes that GDP will rise by 0.5 per cent in the current quarter, following on from 0.7 per cent fall seen between April and June 2012.

Speaking to The Sunday Times, Zangana said the economy will continue to grow until March 2013, before being hit by another two quarters of negative growth.

He says: “A renewed crisis in the eurozone will lead to a further collapse in business confidence and investment.”

Citigroup economist Michael Saunders says GDP will grow by 0.3 per cent in 2013, down from his initial forecast of 0.5 per cent, increasing the risk of a triple dip.

He says: “My guess is that for the next few quarters, after a technical bounce in the third quarter, the economy will be roughly flat, which I would describe as a disastrously bad outcome compared with previous cycles.”

Earlier this month, the International Monetary Fund cut its growth forecast for the UK by 0.6 per cent for 2012 and 2013.

In its quarterly economic report, the IMF chopped the UK’s growth forecast from 0.8 to 0.2 per cent in 2012 and from 2 to 1.4 per cent in 2013. The falls are in comparison to its April forecast.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. We’re all doomed!!!. It would be nice if people had a bit more faith in our country’s economy. Economist Scaremongers that is all there are……making sure that they keep their own jobs projecting what might happen.

  2. I feel so cheered up after reading this article (not)!

    Maybe we should just stop coming out with doomsday predictions and get on with things.

  3. if the greek gov can obtain 50% debt forgiveness then its time the tax paying mortgage holder can, I have been advising clients for 25 years and the debt trend has been one way, simply giving more money to banks to lend wont work when you already have a large group of over indebted borrowers. time for fresh ideas, let the BOE take over the mortgage debts and offer fixed term loans to the mortgage holders at say 2% for the remaining mortgage term! mortgages should be completly portable maintaining the original term and payments, the tax payers have already bailed out the banks yet they will continue to struggle because of the state of the economy, debt forgiveness is already being applied USA and on the cards for Ireland how . the longer we wait the deeper this depression will be.

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