The UK economy has shrunk by 0.2% in the last three months of 2011 according to official figures released by the Office for National Statistics (ONS) today. United Leeds Endeavours looks to see whether Britain is entering another recession.
Economists had originally predicted a 0.1% fall in activity. Indeed these figures are the first quarterly fall since January-March 2010 when heavy snow was blamed for a decrease of 0.5%. United Leeds Endeavours has learnt that the public sector strikes in November, which reportedly lead to almost a million working days lost, could also be to blame for the decrease. Prior to the release of these results the International Monetary Fund cut the projected growth for the UK economy in 2012 from 1.6% to 0.6%.
United Leeds Endeavours listened to George Osborne, Chancellor, as he said that whilst the figures were disappointing they were not a surprise. “They are not entirely unexpected because of what’s happening in the world and what’s happening in the Eurozone crisis.” The shadow chancellor, Labour MP Ed Balls, has criticised the government in light of these figures saying, “By clobbering the economy with spending cuts and tax rises that go too far and too fast, the government has left us badly exposed if the Eurozone crisis deepens this year.”
Mr Osborne appears to reject Mr Balls’ criticism and has pledged to stick to the austerity programme which he believes is essential to deal with Britain’s debt. “Britain has substantial debts. If we don’t deal with those debts, our problems will be worse.”
Managing Director of United Leeds Endeavours is keen to point out that now is not the time for panic. “The ONS advises that these figures are only a preliminary estimate and could be revised up or down by 0.2%. In fact as a whole the economy grew by 0.9% during 2011.”
United Leeds Endeavours understands that a 0.9% contraction in manufacturing is also heavily to blame. This has been caused by weak consumer spending decreasing demand in the UK and the Eurozone debt crisis has damaged exports.
“2012 is looking increasingly likely to be a very tough financial year for Briton’s and businesses. The Eurozone Crisis has really hit at a time when the economy appeared to on the up. United Leeds Endeavours believes that the next few months are going to be critical to discern whether Britain can pull itself out of this slump or whether we are going to enter back into recession.”
