Reuters - Video

EDITION: U.S. | U.K. | IN

Business

UK heads to triple dip recession

Friday, Jan 25, 2013 - 02:03

Jan. 25 - Britain's economy shrunk more than expected in late 2012, pushing it perilously close to a ''triple-dip'' recession, so will it rethink it's tough austerity programme?. Hayley Platt reports

▲ Hide Transcript

View Transcript

Building a bright future is looking increasingly tough for many in the UK. The construction industry is growing - but only just - and Graham Cash from BAM Group says it's hard going. SOUNDBITE: Graham Cash, CEO BAM Group Construction boss, saying (English): "I see the next 12 months as being quite difficult but the underlying improvement will come through beyond that because there's always a lag with construction." Latest GDP figures show Britain's economy shrank by 0.3 per cent - that's worse than forecast and suggests the UK is heading for a triple dip recession. A slump in North Sea oil production was a contributing factor along with lower factory output and a hangover from the London Olympics. Joe Grice is Chief Economist at the Office for National Statistics. SOUNDBITE: Joe Grice, chief economist, Office of National Statistics, saying (English): "It looks to us as if the economy is broadly flat, probably not breaking out of that path we've now seen for two or three years. A very sluggish economy but quite a bumpy economy as well." The IMF recently warned Britain against cutting too fast - it had previously praised the government for its austerity measures. But Finance Minister George Osborne wasn't offering any U-turns. SOUNDBITE: George Osborne, UK Finance Minister, saying (English): "Everyone in this country and everyone in the government knows that Britain has a debt problem, that you can't live beyond your means, that you have to show the world that you can pay your way." But Goldman Sach's Chief UK Economist thinks the government does have problems - the threat of recession could hit business and consumer confidence SOUNDBITE: Jim O'Neil, UK chief economist, Goldman Sachs, saying, (English): "Policy has been on the wrong path and fiscal policy being tightened too much the financial sector is being forced to delever too much still and our productivity rate has just weakened much." Sterling fell to its lowest against the euro in more than year and hit a five-month low against the dollar in response to the news. And recent cold weather won't help. A chill wind is blowing through the UK's economy - it's now 3.3 percent lower than it was at the beginning of the financial crisis. ///

UK heads to triple dip recession

Friday, Jan 25, 2013 - 02:03

Top News »

The Exchange »

Moving Pictures »