Longest recession since records began
Updated on 23 October 2009
Despite expectations that today’s official figures would show the recession had ended, output dropped by 0.4 per cent between July and September, meaning the UK has suffered six straight quarters of negative growth. It appears Britain’s dependence on the City has left the economy floundering. Faisal Islam reports.
The Office of National Statistics said British gross domestic product fell by 0.4 per cent between July and September. It means the economy has contracted for six successive quarters for the first time since records began in 1955.
Year-on-year, output shrank by 5.2 per cent, only marginally better than the record 5.5 per cent annual fall registered in the second quarter. The quarterly decline between April and June was unrevised at 0.6 percent.
The government has forecast that growth will resume by the end of the year
and is counting on a stronger rebound in the coming
years than most independent forecasters.
Experts had predicted a 0.2 per cent advance for the economy, but the official figures show the depth of the current slump is nearing the 6 per cent decline seen between 1979 and 1981.
The persistent decline of the ailing economy comes despite interest rates at a record low 0.5 per cent since March, economic stimulus moves from the government and an unprecedented £175bn boost to the money supply through quantitative easing.
Although figures such as Chancellor Alistair Darling and Bank of England Governor Mervyn King expect some modest growth by the end of this year, pressure on the economy will intensify in 2010 as stimulus measures such as the temporary VAT cut and the "cash-for-bangers" scrappage scheme come to an end.
Unemployment is also rising, and currently stands at around 2.5 million.
