Guardian UK: Recession fear as economic growth hits zero

[marmar]

Recession fear as economic growth hits zero
· Pressure mounts on Brown to fend off slump
· Gloomiest outlook since Black Wednesday


Larry Elliott, economics editor
The Guardian, Saturday August 23 2008



The City was braced last night for Britain's first recession since the early 1990s after the government revealed that belt-tightening by households and business brought growth to a standstill in the second quarter of this year.

Adding to the pressure on Gordon Brown to deliver a stimulus package to relaunch his administration, the Office for National Statistics said the economy had performed less strongly than it had earlier estimated. It revised down growth from 0.2% in the three months to June to zero.

The annual growth rate slowed to 1.4% - its weakest since the period in late 1992 immediately after the pound left the Exchange Rate Mechanism on Black Wednesday - with manufacturing and construction contracting and the service sector barely expanding. Household spending dropped by 0.1% and investment by companies dipped by 5.3%.

Britain has not seen a single quarter of falling growth since the early 1990s, but analysts said last night that the economy was on course to fulfil one definition of recession - two quarters of declining GDP - in the second half of this year.

The domestic side of the economy, which excludes trade, has been on the slide since the start of the year as the credit crunch and rising inflation have created a far tougher environment for consumer spending. House building has also slumped as the property market has suffered, prompting calls yesterday from the House Builders Federation for lower interest rates from the Bank of England. ..........(more)

The complete piece is at: http://www.guardian.co.uk/business/2008/aug/23/economicgrowth.economy

[whistle]

1. Well the U.K. pulled out of the Iraq War, what can they expect

...Capitalism = War = Imperialism = Oligarchy ... No war, no economic boom

[Demeter]

2. It's the Economic War, and the Deflating Credit Bubble That's Sinking Britain

Just as it's sinking the US, even though we are still fighting 2.5 wars.

War is not an economic engine. War is like meth--burns through a body and leaves ashes behind, but the euphoria sucks in the addict....