Updated: Mon, 21 Jan 2013 16:45:00 GMT | By Damian Clarkson, senior editor, MSN Money

Triple-dip recession threat due to snow

Cold snap could tip the UK back into recession as workers - and shoppers - stay home.


Snow has caused travel disruption [image © Rex]

Britain could be facing an unprecedented triple-dip recession as a result of the recent cold snap, economists have warned.

Official figures due out on Friday are expected to show that the economy shrank by up to 0.3% in the fourth and final quarter of 2012 as a result of sluggish performance in the retail, services and construction sectors over the festive period.

And fears are growing that the recent cold snap, which has caused significant disruption, could result in a second consecutive quarter of negative growth.

Workers and shoppers stay home

Insurers RSA estimate that the snow and freezing weather costs the economy £473 million a day. This is because many workers are unable to make it into the office and shoppers choose to remain at home rather than go out and spend money.

“It’s a very challenging time for retailers anyway at the moment so anything like this which deters shoppers further doesn’t really help matters,” the British Retail Consortium said in a statement.

Given that some are expecting the icy conditions to last until February, it’s clear this would have a significant impact on our economic growth – it was estimated that the heavy snow we saw two years ago caused the economy to shrink by 0.5%.

Peter Spencer, chief economic adviser to Ernst & Young Item Club, said: “We are sliding towards a triple dip recession in my view.

“The snow is not helping. When the economy is bouncing along the bottom anyway, a bout of bad weather can easily tip it into negative territory.”

By no means definite

It’s worth stressing that a triple-dip recession is by no means a certainty. For starters, it’s possible the economy didn’t contract at all in Q4 of 2012.

The most bullish forecasters claim that the economy remained unchanged during that period, with strong performance from the construction sector helping to counter the weak performance in other sectors.

And while that might not sound particularly encouraging, it would mean that the economy could shrink in the first quarter of 2013 as a result of the freak weather and we would not officially slip into a recession.

So this Friday’s GDP figures really are key for the government, as any contraction would seemingly mean we’re headed for a third recession in five years. And that would lead to a number of uncomfortable questions being asked of George Osborne and his plans to cut the deficit.

74Comments
21/01/2013 18:39
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I do not know where they expect growth to come from. The biggest certainty of all, is that, people do not have disposable income to spend on our high streets. Bad weather will just show how poor our economy is right now!!
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blame the weather no i dont think so its this mickey mouse government
21/01/2013 20:59
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every time we are in trouble the blame falls everywhere but the right place

 

THE GOVERNMENT

 

The Government  in this country is all out for themselves

Freeze pay rises but want a 35% increase for themselves

They say we are all in the same boat

Well i would not mind a cruise in their boat if only for a week

it would be nice not to have to worry about paying  the rent electric and all the other things that are classed as necessities to live

At the end of the day it dont matter who is in power

As they are ALL OUT FOR THEMSELVES

21/01/2013 20:23
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To get out of this triple dip we are in one ask any body in the street !

 Stop giving money abroad, Reduce fuel by 50p litre.

 I could run this country better than dumb and dumber .

 LOL

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Well it had to come its been The Queen's Diamond Jubilee The 2012 Summer Olympics, now snow IS THIS THE FIRST TIME ITS EVER SNOWED IN THIS COUNTRY
21/01/2013 19:43
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Well, with rail companies in the past blaming trains running late or not running at all; on 'The wrong type of snow' or 'Too many leaves on the line' what can we expect from this idiot Government..... "We're heading into a triple dip recession! I know we'll blame it on the snow"
21/01/2013 22:03
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imagine the country was simplified to £1000 economy. if i sold retail gear for £10 to dave in the UK, dave has £10 less the retailer has £10 more. but the countries economy still totals £1000.

what needs to be done is to sell to other countries so that we grab new cash. increasing the economy instead of stiring our own pot of cash.

more money leaves our country then enters our country. thats where the problem is. we need more exporting. and to remove ourselves from EU laws that prevent exporting.

after all the richest guys have off shore accounts so all our british pounds are ending up in other countries buying foreign villa's. and many immigrants are sending money to their home country.
21/01/2013 21:46
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God help us next year when we get hit by the next foreign flood, another recession will defiently be on its way! The government are a bunch of clowns, WE the people they work for should have the power to sack them on the spot!!
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This mickey mouse government will blame everything on someone or something else except themselves .People dont have any spare cash to spend WHOSE FAULT IS THAT ? Wages frozen for god knows how long now benefits frozen for the forseeable future .High street shops going bang wheres it all going to stop.God help us all if they were to get in again,fortunatly thats very unlikely to happen again

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Avarage working man in the street has to endure a pay freeze and have had to now for a while .Benefits froze for a while BUT OUR MPS WANT A 37% PAY RISE CAUSE THEY NEED IT  .there should be a national strike EVERYONE OUT If they get the pay rise they say they need and deserve.Shouldnt vote for these **** ever again
21/01/2013 21:43
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Probably a pointless uneducated post ! but when Interest rates were higher i remember having a small business that employed 4 people and were kept busy all day long ! But as they were reduced our sales output reduced too !  , sadly all the staff have  been made redundant and the shop is closed !, because the people/customers  with savings had some money to spend , call me stupid but i thought that when things are bought they have to be replaced ie products have to be produced ! more productivity more jobs more growth ! just a observation though !
21/01/2013 21:34
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I would like to see business rates going down. Especially for small businesses...government never helps out its own citizens...they would rather send millions of pounds to help Muslim rebels in Syria!..thank u cameron
21/01/2013 18:31
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Nobody seems to know anything do they!!
21/01/2013 22:08
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as cameron says our lowest paid are not paying tax, that is except the 20p in every pound on almost everything you buy.lower the vat rate
22/01/2013 02:38
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Its been well known for quite a while that we were heading towards a triple dip recession. But it would appear that the Tories are doing the usual thing by blaming everyone and everything else. Don't suppose that this Government may of actually realised that by making so many cuts, and rising taxes that no-one has any money to spend....It's their fault.
21/01/2013 20:08
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So people havent been buying warmer clothes, toboggans, ice scrapers etc for the snow, plus due to the snow driving less miles (but at a lower mpg rate).

 

...it truly is a bad state of play when all the disposable income is used by necessities, or taxed and misused/spent.

 

I know labour screwed the pooch big time, but don't try and blame the snow for a triple dip, its due to more factors than that ffs, try charging more for stuff that costs more and less for stuf that costs less, not putting it in one big pot and trying to govern the withdrawls for various pleas from every department!!

22/01/2013 08:18
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Are they on drugs to come out with this cr4p? Blaming an "act of god" for the economy takes some beating for successive governments sheer stupidity over the last 30 years. Every one with half a brain knows its because immigration has gone out of control, manufacturing etc. was sold off, Big business has been creative in accounting and cheating the tax man. The eec has spiralled out of control. And lets not forget several on going wars to help usa interests.
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Would you buy a used car from Cameron ?
21/01/2013 22:33
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You worry too much,we have had worse winters than this,when almost every thing came to a standstill, Harold Wilson devalued the pound,raised import duty on none essential goods & we recovered.


22/01/2013 09:40
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for god sake,it's only been snowing for a week.  Stop blaming everything but your austerity measures for the hole were in
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