Around the world, economies have been consistently struggling to produce any type of real growth in recovery of the 2008 collapse. European nations like Greece and Italy have been hit especially hard and now the United Kingdom joins them in their efforts to rebuke their current austerity measures in favor of an ineffective stimulus and increased government spending. The Telegraph reports on the UK’s declining economy along with their possible recourse:
The figures from the Office for National Statistics are much worse than forecasts for a 0.2pc contraction.
It marks the third successive quarter of contraction, leaving Britain in its longest double-dip recession in more than 50 years. The economy shrank by 0.3pc in the first quarter of the year, following a 0.4pc contraction in the final quarter of 2011.
Peter Dixon, economist at Commerz bank, said: “Terrible data. Frankly there’s nothing good that comes out of these numbers at all … The economy looks to be badly holed below the water line at this stage. It’s a far worse period of activity than we’d expected.”
Howard Archer at IHS Global Insight called the data a “very nasty surprise”. He said plunging construction and manufacturing output weighed heavily on the economy, while the dominant service sector activity also contracted marginally.
“The steep contraction … heaps further pressure on the government to come up with more measures to boost growth, and will undoubtedly lead to further calls for the fiscal squeeze to be eased until the economy is on a firmer footing,” he said.
“It also fuels speculation that the Bank of England will have to announce more stimulative measures this year.”
Last week the IMF warned in a report that the Britain’s recovery had stalled and the Government must be prepared to introduce a ‘Plan B’ to pump life into the ailing economy.