UK economy will get worse before it gets better

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Reacting to the growth figures for quarter four of 2011, the Institute for Public Policy Research (IPPR)’s Chief Economist says that the short term outlook suggests the UK economy has slipped back into recession and ‘the feared ‘double-dip’ began in the final quarter of 2011′.

IPPR Chief Economist Tony Dolphin said: “Growth in 2011 as a whole was 0.9 per cent. Growth over the four quarters ending in Q4 2011 was 0.8 per cent, though this figure is flattered by comparison with the final quarter of 2010, when output was hit by particularly bad weather. Underlying growth over the last four quarters may have been as low as 0.3 per cent.

“In the final quarter of 2011, output of production industries fell by 1.2 per cent, probably as a result of large-scale destocking (there are very few details available at this point). Output of construction industries was down 0.5 per cent, while output in the service sector was unchanged.

“The recovery from the 2008/09 recession continues to be slow and uneven. Real GDP has increased by 3.5 per cent since the second quarter of 2009. Over comparable periods after the last two recessions, real GDP increased by 7.1 per cent in the 1980s and by 8.8 per cent in the 1990s.”