Britain is currently staring at triple-dip recession if today’s disappointing GDP figures are followed by further decline in current quarter. Figures from Office of National Statistics showed gross domestic product (GDP) shrank by 0.3% in the fourth quarter of 2012, compared with a 0.9% rise in the previous three months.
Economists fear that with the given figures, the triple-dip recession is round the corner as there has been no respite for consumers businesses and snow disruption threatens to cost the economy an estimated £500 million a day.There has been no official definition of triple-dip recession, but it widely accepted as a phenomenon where the economy has fallen into recession three times without returning to a period of robust growth in between.
The effects of the recessionary conditions have been displayed with the recent closure of three high-street retail chains in the new year, as the UK economy is weighed down by austerity, erosion of real earnings and eurozone crisis.
The fourth quarter results are expected to be weaker than the third quarter, which saw a boost to the economy due to London Olympics. The freezing temperatures and snow have also played part in affecting businesses for the first three months of the new year, pushing the economy into triple-dip recession.
Industrial output between September and November, the latest period covered by official data, posted its biggest fall compared to the previous three months since April 2009. Output in the much smaller construction sector rose strongly in October and dropped only a little in November, while the far bigger services sector grew 0.1% on the month in October after a 0.6% decline in September.
The UK fell into double-dip recession last year, contracting for three quarters in a row before bouncing back with growth of 0.9% in the three months to September. The poor GDP figures put additional pressure on the Conservative-led government to relax budget cuts and tax rises, which have been attributed as causes for controlled spending and investment by people.