British economy stuck in recession

http://www.timesofearth.com/Business/?NT=4&nid=12964 LONDON -- The British economy unexpectedly shrank by 0.4 percent in the third quarter compared with the previous quarter, meaning the economy has contracted for six consecutive quarters, according to figures released by the Office for National Statistics (ONS) Friday.
The data indicates that Britain is still in recession and the recovery will be long and fragile. Prior to that, economists predicted that the economy would turn to positive growth of 0.2 percent in the third quarter.

Compared with the same period last year, the economy suffered an annual decline of 5.2 percent in the quarter.

Britain witnessed a peak-to-trough GDP fall of 5.9 percent during the current recession, slightly lower than the 6 percent between the second quarter of 1979 and the first quarter of 1981.

The ONS said a disappointing decline in output from the services sector was the key factor behind the GDP drop. The sector contracted 0.2 percent in the third quarter led by the distribution, hotels and catering sub-sector, which dropped by 1 percent.

In addition, the production sector fell 0.7 percent over the quarter, with manufacturing and construction sub-sectors dropping by 0.2 percent and 1.1 percent, respectively.

The British economy would shrink 4.4 percent this year and the economy would grow by merely 1.3 percent and 1.5 percent in 2010 and 2011, respectively, according to a forecast made by the National Institute of Economic and Social Research.

Thus, the institute suggested any further extensions of the quantitative easing (QE) program should be biased towards the purchase of corporate paper rather than the purchase of government bonds in order to reduce financial stress in the business sector.

Since Britain is still in a recession, the Bank of England would have to further extend the QE program, said Karen Ward, an economist from HSBC, adding that "if they do choose to expand the program, we think it will be 25 billion pounds (about 41 billion U.S. dollars)."

After the worse-than-expected GDP data was published, the pound fell more than 1.3 percent against the dollar to 1.6406. Traders are concerned that Britain may turn out to be the only major economy still in recession.

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[TheRedman777]

freemasons r all behind this,end of world economy,the open of ww3

[doh1959]

@garysquirrelreviews i think the us will go to war very soon then get involved with installing the new leaders so they can get their hands on oil to ease pressure on the economy. but they will go to war via israel. get ready to wake up very soon to the news that israel has smashed irans nuclear facility. thats the trigger.us is in worse state than britain but its going the way i predicted here. expecting worse strikes since the great depression

[garysquirrelreviews]

@doh1959 do you think we will default on our debts or will the US first?

[alexross8]

You all should look at the BNP's economic policies.

[es78xx]

you know i've been looking around at the product we use in our daily lives and hardly any of it is produced in the uk. no wonder the economy is screwed. take something as simple as bottled water. why is it that when i go to buy a bottle of water it's all imported from france????? that just doesn't make any sense to me.

[doh1959]

heres the terrible truth. england is bankrupt in the next 6 mnths buiseness will crash at an alarming rate. there will have to be emergency measures to supply aid to its own citizens. you heard it here

[ericssson]

Today one might argue that England is the locus classicus of economic decline they will never reach the German level of prosperity

[recessionlover]

Brown, Darling and King have promised us better figures by the end of the year that will show that the UK is coming out of recession. How will they do it? By making the figures up of course. How does that song go?

If all you've left is beans, there's money in you jeans, if you pretend. The wolf that's at your door won't be there any more, if you pretend. There's nothing you can't be. Just wish and see...