Tuesday, 25 October 2011

Eurozone crisis is dragging UK into double-dip recession


The economy might already be shrinking because of the crisis in the eurozone, one of the Bank of England’s leading experts has warned.

Martin Weale – who sits on the Monetary Policy Committee which sets interest rates – said that the economy is at high risk of contracting in the final quarter of 2011 owing to anxiety about the single currency bloc.
If his prediction is correct, the  country would be on the verge of a  double-dip recession.
‘Looking at the economy at the moment, I think the problems of the euro area and the knock-on consequences for our banks, for business confidence, for the way consumers feel about things are likely to prove important,’ he said.
‘I certainly do think the underlying  rate of growth of the economy is weak  now and I wouldn’t be terribly surprised if we were to see output contract in  the fourth quarter.’ 

A transcript of the October MPC meeting reveals that  the nine-person group predicted growth in the last three months of the year would be ‘close to zero’.

Read more: http://www.dailymail.co.uk/news/article-2053075/Eurozone-crisis-dragging-UK-double-dip-recession-warns-Bank-England-expert.html#ixzz1bmukcoeG

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