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| Britain |
| UK edges closer to recession |
| 2008-12-24 |
| Britain has announced its GDP is shrinking at a much faster pace than previously thought as the country is edging closer to recession. The country's economy is seeing its first contraction at its sharpest rate since the early 1990s, and productivity has also dropped for the first time since 1989, the Office for National Statistics announced Tuesday. It said the GDP declined by 0.6 percent in the second quarter, altered down from a previous estimate for a 0.5 percent fall - the biggest fall since 1990 and much worse that what the analysts had forecasted for an unrevised figure. The analysts warned there is worse to come after separate figures for the third quarter showed that for the first time in nearly 20 years, workers' output has fallen drastically, while service sector output, which accounts for nearly 75 percent of the whole economy, continued to shrink in the three months to October. Policymakers are in consesnsus that the credit crunch is driving Britain into its first recession since the early 1990s. The decline, which will likely be seen in the fourth quarter and the first quarter of 2009, will be significantly worse than what has been seen in the third quarter, economists say. The two consecutive quarters of contraction have forced policymakers to step up measures to prevent a recession in Britain from becoming a depression as soaring unemployment, a tumbling housing market and tight credit have hit hard. Meanwhile, the government's 20 billion pound stimulus package, which includes a temporary cut in sales tax, has been dismissed by some experts as being too minor to make any difference. |
| Posted by:Fred |
| #1 Maybe it's a sign. |
| Posted by: g(r)omgoru 2008-12-24 06:37 |