Articles - Triple dip recession avoided by UK


Schroders' European Economist, Azad Zangana, comments on today's UK GDP announcement:

 Initial estimates for Q1 GDP show the UK narrowly avoided an unprecedented triple-dip recession. UK output expanded by 0.3% in the three months to March, having contracted by 0.3% the previous three months. The reading was stronger than expected - according to the Bloomberg consensus, the city was expecting growth of just 0.1%.
 
 The news of having avoided a triple-dip recession will come as a relief for the Chancellor George Osborne who was recently told by the IMF that a change of course on his austerity plans may be necessary. In our view, the government has done well not to chase aggressive fiscal targets when it has missed them, but instead try to maintain some momentum in the reforms of public services. Nevertheless, the government should be using near historic low interest rates to undertake huge multi-decade infrastructure investment projects, which the UK desperately needs to unlock its future growth potential.
 
 Overall, regardless of the political points scoring that will follow, the figures confirm what we have known for some time. The UK economy is facing severe headwinds with the household sector, banking sector and government all trying to deleverage at the same time. Meanwhile, the non-banking corporate sector – the only healthy part of the economy – has been shaken by the crisis in the Eurozone. As a result, the economy is barely generating any growth at all.
 
 Looking ahead, we expect the UK economy to pick up in the second half of the year on the back of stronger corporate investment. However, the key threat in the near term is the faltering Eurozone economy – the UK’s biggest export destination. Political instability coupled with severe austerity is damaging confidence in the Eurozone, and having a knock on impact on UK exporters. We expect the Bank of England to respond with another £25-50 billion of quantitative easing in May, which will complement the expansion of the funding for lending scheme.
  

Back to Index


Similar News to this Story

Pension scheme cyber attacks are you prepared
In the ever-evolving world of cyber risks, governing bodies, trustees and pension boards must understand their responsibilities and know how to effect
Final Day for nominations for the 2025 Actuarial Post Awards
We would like to announce, that after yet another record number of nominations for the Actuarial Post Awards that today is the final day for nominatio
The global mining insurance market is softening, fast
Excavating value in a soft market. Rates are down, coverage is broadening, and capacity is strong. But risk leaders must stay sharp. The property dama

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.