In recent weeks economists had been predicting that the economy would just slightly miss a double-dip recession by a very small growth of 0.1%. Unfortunately, even City economists missed the mark as the shocking news was revealed today that the nation is indeed in the grips of yet another recession.
Although there has been much talk of the potential for sliding backwards into a recession, many consumers don’t quite understand the awful significance of this event. After just having recovered, the UK took a downward turn s the UK GDP shrank 0.3% in the final quarter of 2011 and .03% in the first quarter of this year. This was truly a shock to government as well as economists as they had missed the mark by almost one-half of a percentage point. This is significant that they could have been so far off with their calculations.
So what does this mean for Britons? In effect, a recession is defined as two consecutive quarters of decline in the economy. It looks as though government will try to combat this news with increased fervour in their austerity programme. The public sector will most likely try to cut costs even further which means social programmes are likely to lose even more financing and jobs will be cut by the tens of thousands.
Since Britain’s debt is already at record levels, there is mounting pressures on government. It may still be too early to predict what moves the coalition government will make next, but it is almost certain that they will advance austerity measures on a country already plagued with sacrifice. The Prime Minister admitted that recovering from a recession which is the worst in ‘living memory,’ but the Labour shadow chancellor struck back with an “I told you so!”
Labour has always contended that the austerity drive was ‘self-defeating’ with cuts in spending and taxes rising almost by the day. The party further lashed out at David Cameron and George Osborne who they decry as ‘arrogant’ in their nonchalance when they were warned that austerity would lead the nation back into recession. As those predictions have now proven true, all eyes are on Labour to see if they will finally be heard.
