According to the latest data, the UK has sunk back into recession. The shock downturn heaps additional weight on the government to cushion austerity measures and intensify its efforts to boost the economy. The latest decline was caused by falls in industrial and construction output while Britain’s dominant service sector hardly grew at all.
“Well, statistics are statistics and it is highly likely that the underlying economy is stronger than the figures suggest but the real problem is one of confidence. Further reports of doom and gloom could well undermine the tenuous resurgence of business confidence and send the country spiralling back into a real recession,” said Gerald Irwin of Sutton Coldfield based Licensed Insolvency Practitioners and Business Advisers, Irwin Insolvency.
In reality, the figures are slightly worse than many expected, but the fact that the UK is now technically back in recession should not detract from the underlying reality, which is very much as predicted. After all, the economy has been bumping along the bottom for some time. Indeed, over the last year and a half, the economy has fluctuated between quarters of growth and contraction and the Bank of England had previously warned that the economy would continue to zigzag this year.
“The problem with the economy is that is far too reliant on the service sector and household consumption which appears to suggest that the recovery will continue to be fragile but whether there will be further quarters of negative growth is open to question. Business owners should not be distracted by the latest news but should continue to fight for their operations,” added Mr. Irwin.