UK Economy Crawling Slowly from Recession
The longest recession in Britain since the end of World War II is finally ending, according to figures released on Tuesday. However, this has been such a slow and narrow climb that fears remain the economy may slip again due to higher VAT rates introduced at the beginning of the year.
The Office for National Statistics produced their quarterly figures, saying that the economy grew 0.1% from October to November, which was good but still less than the 0.4% hoped by economists. Joe Grice, head of the ONS, emphasizes that these figures may be revised to a better growth rate after final calculations are completed.
The market was disappointed with this weak return of growth, which caused the pound to sharply fall after strengthening for the last few weeks against both the euro and dollar. This trend could continue due to the difficulties ahead for Britain in coping with nearly £1 trillion in national debt, as well as a £180 billion deficit for the year alone.
It’s now expected that the Bank of England will keep their interest rates at the lowest they have been in 300 years for a while, but their decision to stop buying government bonds could threaten economic activity over the next few months. The snowfall during December and into this month will also affect the economy’s health, as many businesses were hurt by the weather.
Growth for the whole year is expected to be 1.4%, according to predictions from economists. This is a big hope and one that the UK desperately needs in order to keep from falling back into recession, as it shrank by 4.8% last year, which was the biggest fall since 1930.
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