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Triple-dip recession threat due to snow
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.
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every time we are in trouble the blame falls everywhere but the right place
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
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 .
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
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!!
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A new study suggests a typical financial emergency costs around £1,200 - would you be able to raise that kind of money within a month?
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- Yes - from my savings
- Yes - I could put it on credit
- Yes - I could borrow from family or friends
- No - raising that kind of money in a month would be impossible