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UK set for double-dip recession, warns BDO

The UK economy may be heading for a double-dip by the end of the year if the current economic trends continue, according to a new report.
The research by BDO, the accountants and business advisers, said long-term economic prospects are not showing signs of improvement.

BDO's Optimism Index – which reflects how UK businesses expect trading to develop in the medium term – tumbling to 93.1 in August from 95.5 in July.

These levels have not been seen since the deepest parts of the recession, between November 2008 and July 2009. It is also the first time the index has dropped below the crucial 95 mark since July 2009, suggesting that the economy may contract at the end of this year.
The company's output Index, which tracks UK businesses' turnover expectations, also shows a marked drop from 99.8 in July to 97.8. This data points to sluggish economic growth in the second half of the year.
The lack of confidence may coincide with government communications around forthcoming fiscal tightening, combined with the looming Comprehensive Spending Review that will set out the government's spending plans from 2011 to 2015.
Peter Hemington, partner at the firm, said: "If the end of 2010 does indeed turn out to be the start of a double dip, it certainly won't be a merry Christmas for UK businesses.
"What's so disappointing is that businesses seem to be convincing themselves that things are going to get really tough in 2011, and are deferring new hires and investment decisions as a result."


http://www.telegraph.co.uk/finance/economics/7997793/UK-set-for-double-dip-recession-warns-BDO.html
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Comments

  • Spiv wrote: »
    [Thump] That be the thump of millions simultaneous facepalms as half the country says no !!!!!!
  • bendix
    bendix Posts: 5,499 Forumite
    I used to organise one of these business confidence surveys when I worked for one of BDO's Big Four competitors years ago. It involved emailing around 20 companies - completely unscientific of course. We then had partners spin all sorts of bull into a media story, just to get some press coverage.

    I don't put much store by this.
  • nearlynew
    nearlynew Posts: 3,800 Forumite
    Obviously spin and bullsh1t.

    We haven't got out of the recession yet, never mind dip back in.
    "The problem with quotes on the internet is that you never know whether they are genuine or not" -
    Albert Einstein
  • DervProf
    DervProf Posts: 4,035 Forumite
    That article can`t be taken seriously, it doesn`t say "apart from Aberdeen".
    30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.
  • DaddyBear
    DaddyBear Posts: 1,208 Forumite
    I fully expect Q1 2011 to have negative growth but I doubt that we'll get two consecutive negative quarters and hence no technical recession.
  • amcluesent
    amcluesent Posts: 9,425 Forumite
    edited 12 October 2010 pm31 9:26PM
    The predicted ultra-harsh winter could be the catalyst, think of 1963 and England coming to a standstill.

    Weeks when no goods can be moved about on the roads, firms operating on a skeleton staff as the railways freeze up, fuel supplies running low etc. Everyone thinking about sky-high fuel bill slash other spending, and the public sector costs spiral upwards as the emergency services struggle to cope. GDP could easily drop 4% in the quarter.

    Russia will certainly use a harsh winter to show it's power and stop gas supplies into Europe, so expect 50%+ spike in the spot market prices for fuel. Inflation will be >5% with this and VAT going up. Of course, anyone still waged won't dare ask for an increase so 2011 will be when standard of living slumps, even for the 'lucky' ones in paid work.

    Every 'nice' street where there used to be waged, middle-income families will be dotted with repo properties, overgrown gardens and DSS moved in by slum landlords.

    Expect waves of closures of clothes shops, restaurants, travel agents etc. as everyone shops just for milk, bread and potatoes. Meat will be a once a month treat. Everything else will be charidee shops and hand-me-downs.

    Grim, grey, grinding years of austerity stretch out ahead of us.
  • carolt
    carolt Posts: 8,531 Forumite
    Always good to look on the bright side, isn't it?
  • amcluesent wrote: »
    The predicted ultra-harsh winter could be the catalyst, think of 1963 and England coming to a standstill.

    I thought the met office had stopped the long range forecasts (that were wrong anyway).
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    amcluesent wrote: »
    The predicted ultra-harsh winter could be the catalyst, think of 1963 and England coming to a standstill.

    Where you get this from, and are you serious?

    I loved the snow last winter. For an hour.

    Unfortunately didn't like the ice layer under the snow, which kept my whole area stranded for a few days.
  • amcluesent wrote: »
    The predicted ultra-harsh winter could be the catalyst, think of 1963 and England coming to a standstill.



    Winter didn't start last month
    Not Again
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