Jew World Order

• Official figures today showed the
  economy shrank by 0.2 per cent in the first quarter of 2012
• It follows a fall of 0.3 per cent in the final quarter of 2011
• Cameron: ‘I do not seek to explain away the figures’

By
Hugo Duncan and Charles Walford

PUBLISHED:

03:50 EST, 25 April 2012

|

UPDATED:

07:59 EST, 25 April 2012

Britain has suffered its first double-dip recession since the 1970s after a surprise contraction in the first three months of the year.

Official figures today showed the economy shrank by 0.2 per cent in the first quarter of 2012 having declined by 0.3 per cent in the final quarter of 2011.

It marked the first double-dip since 1975 and was a bitter blow to Chancellor George Osborne in the wake of last month’s ‘omnishambles’ Budget.

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The decline in gross domestic product
(GDP) was driven by the biggest fall in construction output for three
years, while the manufacturing sector failed to return to growth, the
Office for National Statistics (ONS) said.

The news that the UK is back in recession is a huge blow for George Osborne

The return to recession – defined as two consecutive quarters of economic decline – will fuel fears that the UK faces years of high unemployment and stagnant growth.

It was seized on by Labour and Mr Osborne’s opponents as evidence that the Chancellor’s economic plan is not working.

At Prime Minister’s Questions today, David Cameron said: ‘They are very very disappointing figures and I do not seek
to explain them away.’

Bbut he blamed the failures of Labour and said they have ‘painstakingly
difficult plans that we will stick to’.

Economists have warned that Britain is in the grip of the longest economic slump for 100 years – worse even than the Great Depression of the 1930s.

Andrew Smith, chief economist at KPMG, said: ‘It’s official, we’re in a double-dip.

‘But worse, output remains broadly unchanged from its level in the third quarter of 2010 and, four years on from its pre-recession peak is still some 4 per cent down – making this slump longer than the 1930s Depression.

The second successive GDP quarterly has put the UK back in recession

‘Looking ahead, output is expected to
remain weak in the second quarter and with extra holidays, the Jubilee
and the Olympic Games distorting the picture over the summer it will be
some time before the underlying picture is clear.

‘But even if activity recovers in the
second half, overall this looks like being – at best – another year of
weak growth, held back by squeezed real incomes and public spending
cuts. Recovery postponed again.’

Mr Osborne said: ‘It’s a very tough
economic situation. It’s taking longer than anyone hoped to recover from
the biggest debt crisis of our lifetime – even after the recent fall in
unemployment.

‘But over many years this country built up massive debts, which we are having to pay off. It’s made much harder when so much of the rest of Europe is in recession or heading into it. The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt.’

Commenting on the figures, TUC General
Secretary Brendan Barber said: ‘This is worse than expected. There has
been no growth over the last year, and the economy is 0.5 per cent
smaller than six months ago.

‘Austerity isn’t working. The
government should look across the Atlantic and follow President Obama’s
alternative that has reduced unemployment and brought growth back to the
USA.’

The GDP forecast for the next few years suggest the economy will see slow improvement, if any

Britain plunged into a brutal
recession in early 2008 as the financial crisis and banking crash
wreaked havoc on the world economy. But it started recovering at the end
of 2009 – albeit slowly.

But the preliminary estimate, which may be revised later, means the UK is back in a technical recession.

The ONS’s first estimate is done
before more than half of the data has been gathered and some economists
are hopeful that today’s figure will be revised higher in coming months.

However, the margin of error for the
figure is 0.2pc – so the figure could in fact be as bad as a 0.4pc
contraction, while the best-case scenario is stagnation, which would
mean recession was narrowly avoided.

The key figures that have driven the slump back into recession are:

The second quarterly fall in a row was even worse than that predicted last month by the Organisation for Economic Cooperation and Development.

Prime Minister David Cameron’s official
spokesman said: ‘The figures out this morning are disappointing but it
is taking longer to recover, partly because we have suffered from the
biggest debt crisis in our lifetime and partly because of what is
happening elsewhere in the world, and in particular in Europe.

POUND TAKES A TUMBLE

The
pound fell around half a per cent against the dollar and the euro to
below $1.61 and €1.22 as investors took fright at the figures.

Richard
Driver, an analyst at currency expert Caxton FX, said: ‘The news that
the UK economy has re-entered a technical recession is extremely
disappointing.

‘A
0.5 per cent contraction in the UK economy as a whole over the past six
months paints a pretty depressing picture and confirmation of the
dreaded double dip is likely to be weigh on domestic consumer
confidence.

‘The
light at the end of the tunnel is that the UK economy should pick up in
the second half of the year, assuming the Olympics delivers the boost
to growth that is expected.’

Official
figures yesterday showed that the Chancellor hit his Budget forecasts
last year – cutting borrowing from £137billion to £126 billion.

But
it is feared that the return to recession and weak growth for the rest
of the year will hamper efforts to reduce the deficit in future.

‘The one thing that would make the situation even worse would be to abandon our plan and deliberately add more borrowing and add to debt.

‘What is happening in the eurozone clearly has an impact on our economy. Partly that is through trade – it is a very big market for the UK and UK businesses. But it has a wider impact. As the Prime Minister has said before, what happens in the eurozone has had a chilling effect on our economy here.

He added: ‘It is an extremely difficult economic time, but our plan to reduce the deficit is the right plan and means that we have got interest rates at record lows, which means that mortgages and loans are cheaper and that supports recovery.

‘We are sticking to our plan.’

Shadow Chancellor Ed Balls said:
‘David Cameron and George Osborne complacently boasted their austerity
plan had taken our economy out of the danger zone, but their failed
policies have plunged us back into recession.

‘We consistently warned that their
austerity plan was self-defeating and that cutting spending and raising
taxes too far and too fast would badly backfire.

‘David Cameron and George Osborne
arrogantly and complacently dismissed people who warned of the risk of a
double-dip recession and the country is now paying a very heavy price.
Their economic credibility is now in tatters.’

Mr Balls added: ‘The Chancellor needs
to explain why America, which has taken a much more balanced approach
with a jobs plan to boost growth, has more than recovered all the output
it lost in the global recession while our economy is shrinking again.

‘The price of this recession is
billions more borrowing to pay for economic failure. The Government’s
pledge to balance the books by 2015 is now in tatters and the next
Labour government will have to clear up George Osborne’s economic mess.

‘The longer this out of touch and incompetent Government sticks with these failed policies, the more damage will be done.’

However,
the current downturn is expected to be nothing like as severe as the
previous recession of 2008/09, which spanned more than a year.

The Bank of England admitted in
minutes of its April interest rates meeting that a recession was still
possible but that it was encouraged by a wide range of surveys and data
for the powerhouse services sector, which point towards underlying
growth in the first half of the year.

Joe Grice, chief economic adviser to the ONS, said that an increase in fuel buying came at the end of the quarter.

Driving force: Panic buying surrounding the fuel crisis gave retail sales a boost

But he said there was ‘no reason to suppose [there were] any special factors… in these figures’.

Retail sales were boosted last month by panic-buying of petrol amid fears of a tanker drivers’ strike. A mini-heatwave also encouraged people to buy summer clothes.

But the sharpest decline in construction output for three years – down 3 per cent in the first quarter – slammed the fragile recovery into reverse. Manufacturing was also in decline.

Economists warned that the official reading of the economy may be too gloomy, as recent industry surveys for both the manufacturing and construction sectors have pointed to growth.

Chris Williamson, chief economist at Markit, said: ‘The underlying strength of the economy is probably much more robust than these data suggest.

‘The danger is that these gloomy data deliver a fatal blow to the fragile revival of consumer and business confidence seen so far this year, harming the recovery and even sending the country back into a real recession.’

The British Chambers of Commerce
(BCC) said the news is likely to have a damaging impact on confidence
on consumer confidence, which has grown in recent months.

David
Kern, chief economist at the BBC, said: ‘These figures are at odds with
the experiences of many UK businesses which continue to operate with
guarded optimism. We think it is likely that the preliminary estimate
will be revised upwards when more information is available.

Making hay while the sun shines: Retailers were boosted by sales of summer clothes during the warm weather

‘While the Government must persevere with plans to reduce the deficit despite these figures, it must introduce more measures to empower businesses to drive recovery.’

Neil Prothero, UK economist at the Economist Intelligence Unit, said: ‘Irrespective of whether revised figures show a slight rise or fall in GDP, the uncomfortable fact remains that the economy is in a desperately fragile state, despite unprecedented stimulus and financial support.

‘We expect the economy to contract for a third successive quarter in April to June, and with the economic picture across Europe forecast to deteriorate further, our already below-consensus UK GDP forecast for 0.2% growth in 2012 is already appearing a little bullish.’

A fall in sentiment triggered by
today’s figures will come as a blow to the economy at a time when
companies are being encouraged to invest to stimulate growth.

BCC director general John Longworth
said: ‘A negative first-quarter figure, however small, will mean the
economy has entered a technical recession and this could affect the
sentiment among businesses.’

Stubborn inflation is set to further hurt people’s living standards and unemployment is due to surge higher amid the Government’s austerity measures.

Meanwhile, the official return to recession has also raised fears of a stockmarket sell-off, with markets becoming increasingly volatile over fears that the eurozone crisis is escalating.

Overall, a mixed picture of the economy has emerged in 2012, with ONS data showing manufacturers saw steep declines in February, while construction suffered hefty falls in January and disappointing growth the following month.

And there are fears that the extra bank holiday for the Queen’s Diamond Jubilee will act as a drag on the second quarter, while the impact of the Olympics is difficult to judge.

Vicky Redwood, chief UK economist at Capital Economics, said even without the fall in construction, ‘output would have done no better than stagnate’ and forecast that GDP will contract by about 0.5 per cent this year.

She said: ‘The main disappointment was the meagre 0.1 per cent rise in services output – the surveys had pointed to services growth of 0.5 per cent or more.

‘Even if the underlying picture is stronger than the official GDP figures show, there is no guarantee that the recent pick-up will continue.’

Bank of England governor Sir Mervyn King recently warned that the economy might ‘zig-zag’ in coming months.

Meanwhile, doubts are growing that inflation will fall back to its 2 per cent target amid high oil and food prices which triggered an unexpected rise in the cost of living last month, and will also act as a drag on the recovery.

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