Britain could well be back into recession – warns a senior member of the rate-setting committee, Monetary Policy Committee (MPC). He said the economy’s recovery had been sluggish in the previous six months of last year.
David Miles states, “There is a risk the economy could fall back into recession, though I do not believe this is the most likely outcome.”
Official data shows very little growth in the country’s GDP – a mere 0.2% in the second quarter of last year – after a stagnant growth in the last six months.
Analysts are estimating a 30% chance of raising interest rates this year by the Bank of England (BoE). The economy’s recuperation is so fragile that they assume the possibility of the bank renewing its printing program in the hopes of boosting growth.
A study by leading British Trade Body, Confederation of British Industry (CBI) that polled British manufacturers showed a slump in confidence in the economy; factories are now preparing to axe jobs in the coming months.
The outlook was the most depressing; CBI chief advisor Ian McCafferty states, “The combination of political and economic uncertainty is sapping confidence” referring to the endless bickering over the United States’ debt ceiling and the eurozone’s financial crisis.
The British Retail Consortium confirms the absence of economic trust; 3,100 jobs have been cut in UK stores just in 2010. The manufacturing sector, which was the major performer in the first days of the economy’s recuperation, stooped down 0.3% in the second quarter.