Officially, a recession is characterised by a contraction of Gross Domestic Product (GDP) for two consecutive quarters, so even if figures due out on Friday show that the UK economy shrank in the fourth quarter of last year, the country will not, officially, be in recession. Nevertheless, with analysts predicting a contraction of GDP between 0.1% and 0.4% in the final three months of 2012, the news for the economy is hardly ideal.
Teetering on the Brink of a Triple-Dip Recession
Recent poor results from the manufacturing and retail sectors in the UK, combined with heavy snowfall across the country, which is expected to badly affect high-street spending, have left the country teetering on the brink of a triple-dip recession. In fact, if Friday's figures are as expected, they may indicate that the UK has been in recession all along, with the growth and contraction quarters simply part of the recession phase of the cycle.
The UK is one of the Countries in the most Troubled Group in a Triple-Speed Global Economy
Whatever the outcome on Friday, the fact remains that the UK, along with several other leading economies, is one of the countries in the most troubled group in a triple-speed global economy. Japan and most of the countries in southern Europe are in recession, parts of northern Europe, Brazil, Canada and the United States have returned to economic growth, albeit slow, while several emerging economies continue to forge ahead.
China, now the second-largest economy in the world
The Chinese Prime Minister, Wen Jiabao, recently called for the People's Bank of China to promote "healthy" economic growth after the Chinese economy expanded by just 7.8% in 2012, compared with 9.2% in 2011 and 10.3% in 2010. The figures from China, now the second-largest economy in the world, still compare very favourably indeed with those from the UK, the seventh largest. The UK economy expanded by just 1.8% in 2010, just 0.76% in 2011 and contracted by 0.38% in 2012.
The Bank of England has injected a total of 375 billion into the UK economy via its quantitative easing programme.
The Bank recently reported that there had been a significant increase in the amount of credit made available to consumers and businesses, but quantitative easing must come to an end at some point, leaving a fragile economy to fend for itself. That's unlikely to be the only risk facing the UK economy in the months and years to come. Global investors' perception of the eurozone must, at some point, fall in line with the economic data from the region, which is poor and inflated speculation in Western governments' bonds must, likewise, come to an end.
Triple dip three speed global economy
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