Topic: | The Real Big Story : UK Economy continues to shrink under Gordon Brown | |
Posted by: | David Giles | |
Date/Time: | 23/10/09 16:41:00 |
According to the BBC: "The UK economy has shrunk for six consecutive quarters for the first time since records began in the 1950s. " UK gross domestic product (GDP) contracted 0.4% between July and September, and is a big surprise as almost every City analyst expected positive growth of around 0.2%. "An unexpected decline in the services sector was the key factor behind the drop, with the distribution, catering and hotels sector performing particularly badly. "Since its peak in the first quarter of 2008, the UK economy has slid 5.9%. "The contraction seems to further support the theory that recovery will be slow and painful, with unemployment remaining stubbornly high for some time to come. "The Treasury forecasts that GDP will contract by a total of 4.3% in 2009, recovering to growth of 1.3% in 2010. "And total government debt is projected to rise to £1.4 trillion, nearly doubling to 80% of GDP. "The worse-than-expected figures are likely to make the Bank of England consider extending its policy of quantitative easing. "Quantitative easing is the central bank's policy of printing money and using it to buy bonds from banks and other companies to help stimulate the economy. " Sources: ONS, National Institute of Economic and Social Research Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/7789844.stm |