Recession Looms as the UK Economy is in Prevention Mode
Conditions of a collapse in consumer confidence are now at levels last seen during the two previous recessions in the UK economy in 1990 and 2008. A recent survey found sentiment regarding unemployment and wage possibility had reached historic lows. With consumer confidence waning and pressure mounting on the Bank of England to repair a broken economy, news of a probable second recession could not surface at a less fortunate time.
When the news of the survey sweep through the Treasury, alarms will immediately start going off. The autumn statement from the Treasury is expected to outline a plan to assist an ailing economy. George Osborne and business secretary, Vince Cable have already stated their upcoming support for the business side which will be in support of investments. Osborne has remarked about UK consumer confidence blaming the euro crisis for the majority of it.
Paul Fisher, Monetary Policy Member, offered his opinion about what he sees in the near future for the UK economy. He believes the economy will struggle during the last quarter of the year and sees a possible better than average chance of another recession taking place.
He continued, saying: "Looking at the fourth quarter for example, at best it seems likely to be flat, could easily have negative growth, so the technical outcome of two quarters of negative growth in a row could quite easily come about. But hopefully we have spotted it coming and we've taken action which will help to prevent it."