Following Wednesday’s shock revelation that the UK has slipped into its first double-dip recession since 1975 (as the economy shrank 0.2pc in the first quarter), economists warn that Britain’s collapse back into recession will drag on until June at the earliest and condemn the country to another lost year.
Here is what some economists told The Telegraph:
1. Gerard Lyons, Standard Chartered’s chief economist, said: “The likelihood is that the data will further dent confidence and push the recovery back.”
2. Michael Saunders, Citi’s UK economist, added that the economy was likely to weaken further. “The data make it clear that the economy is very weak.”
3. Chris Crowe at Barclays Capital said: “Weak GDP, combined with persistent inflation, highlights the [Bank’s] ongoing policy headache. Further QE in May seemed unlikely. Today’s outturn may give the committee reason to reassess.”
4. Nick Clegg urged business leaders not to have a “panicked reaction” to the figures.
5. The British Chambers of Commerce said the data “paint an unduly pessimistic view of the economy”.
George Osborne, whose policies have so far failed to lift growth said that the economy is expected to rebound in the second half of the year. Mr Osborne accepted that the GDP figures were “disappointing” but defended his austerity plans, saying: “The one thing that would make the situation worse would be to abandon our plan and add more debt.”
Stubbornness, not only austerity, kills slowly as well…