Britain set to slide into recession

According to recent reports Britain is set to slide into recession later this year, and after a second quarter of zero growth is set to face two consecutive quarters of negative growth, which will mean that it is in recession by the end of the year.

There are a number of factors that are threatening the economy and heightening the risk of recession, some of which were outlined in the recent report. This included unemployment levels, stagnant wages, and falling house prices. The warning of recession was not the first over recent weeks, as a number of industry groups have predicted this.

The European Commission recently stated: ‘The financial turmoil has now entered its second year. Overall, the situation remains fragile as losses continue to mount and confidence in key financial markets is not yet restored.’ It added: ‘Private consumption is likely to fall somewhat due to the combined impact of tighter credit conditions for household borrowing, weakening housing and labour markets and inflation-induced stagnation in real disposable income.’

Shadow Chancellor, George Osborne, stated: ‘Now the EC joins the OECD in saying what Gordon Brown refuses to admit: that Britain is one of the economies worst affected by the global uncertainty. He won’t level with people about the state of the economy, because he was the Chancellor that left us so ill-prepared.’