UK economy continues to slide amidst downturn
24 Jul 2009
The British economy continued to its downward slide as it contracted twice as much as economists had forecast in the second quarter. The official figures released on Friday leave little room for hopes of an imminent recovery.
The economy contracted by 0.8 per cent between April and June as manufacturing output witnessed record falls and financial services declined sharply on continued recessionary trends.
The British economy has now registered its biggest drop since 1955 shrinking 5.6 per cent since the second quarter of last year.
The Bank of England, had in recent weeks lowered interest rates to a record low of 0.5 per cent in a bid to spur growth. It had also injected funds in the economy, and according to analysts the measures were starting to bear fruit.
There was also some cause for cheer as a flurry of data showed a jump in retail sales, increasing homebuyer inquiries and a slowing rate of decline in manufacturing output.
According to the British Chambers of Commerce's quarterly survey of 5,600 companies released just two weeks ago, confidence levels in the economy were improving and the worst of the recession was over.
According to Liam Byrne, chief secretary to the Treasury, the figures are fresh evidence of the scale of the global downturn but they also point to the slowdown in the decline as compared to the winter and was the reason the government remained cautious but confident of growth returning towards the end of the year.
