Double-dip recession 'not inevitable', but study predicts stagnation
Tuesday, 10 January 2012 10:46
Although the economy is likely to stagnate in early 2012, another recession is not inevitable, according to a new release from the British Chambers of Commerce (BCC).
In its Quarterly Economic Survey, it looked at economic indicators from the final quarter of 2011, which painted a lacklustre picture of Britain's finances.
The organisation calculates its statistics as balances, which are made up of the percentage of firms reporting increases minus the percentage reporting decreases.
For domestic orders in the service sector, the home orders balance fell six per cent to minus nine per cent, while it also fell for manufacturing orders.
In terms of recruitment, expectations for employment in manufacturing fell to minus eight per cent, while it fell by four points to plus two per cent in services.
Although the figures suggest minimal growth, predictions for the coming quarter have weakened.
However, while the BCC agreed the results are a cause for concern, it insisted they do not mean recession is a foregone conclusion, as they are still better than those seen during the last downturn.
Director-general John Longworth said: "Action is needed urgently to tackle short-term stagnation and a lack of business confidence, damaged by the ongoing eurozone crisis.
"The UK does have the potential to recover and make its way in the world. We have the talent, the energy, and the enterprise. All we need is an environment that puts business first."
Last month, Standard Chartered Bank suggested that the UK economy could contract by 1.3 per cent in 2012.
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