United Kingdom

Double dip recession fears as GDP slumps

Published on 26 January 2011 at 09:48

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“I see trouble ahead,” leads the Independent, quoting Mervyn King, Governor of the Bank of England, after the release of official data showing that the British economy shrank 0.5 percent during the last three months of 2010. “The news was greeted as "shocking", "dire" and "terrible" by economists,” the London daily notes, raising fears of a double dip recession and, according to King, inflation hitting a 5 per cent high by 2012. Chancellor George Osborne has been quick to endorse the Office for National Statistics’ (ONS) contention that the fall in output recorded is mainly due to the “terrible weather” at the end of 2010. He has rejected changing course on his budget austerity drive. “That would plunge Britain back into a financial crisis,” he said — as if the UK was not already in the middle of one.

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