British economy grinds to a standstill; technical recession likely, say experts
23 Aug 2008
Current statistics reveal a grim picture for the British economy. If latest numbers from the Office for National Statistics are to be believed, the nation's economy shuddered to halt between April and June, ending its longest stretch of economic growth for more than a century.
Experts believe that a full-blown recession may not be far behind, with many opining that the early warning signs, such as galloping inflation, clearly visible. A recession is defined as a period of economic inactivity where the growth is negative for two successive quarters.
Considering the adverse report put out by the International Monetary Fund (IMF) earlier this month, such sentiments aren't unexpected. But the latest figures paint a worse picture. (See: IMF downgrades UK's growth rate, says inflation pressures to continue)
The Office for National Statistics said economic growth, expressed as the Gross Domestic Product (GDP) was unchanged in the second quarter from the first, revising an earlier estimate of 0.2 per cent growth. The slowdown was evenly distributed.
Construction work has slowed dramatically in the country, particularly house building, and output fell by 1.1 per cent in the second quarter, more sharply than the initial estimate of 0.7 per cent. Manufacturing output fell by 0.8 per cent, revised down from a 0.5 per cent fall, and initial estimates for growth in the services industry were halved to 0.2 per cent from 0.4 per cent.
The slowdown saw the British prime minister, Gordon Brown, come under further attack for his handling of the economy, as he is no longer be able to boast of continuous growth since the Labour government came to power in 1997.
