The UK has remained firmly in a second recession of the current financial crisis, as the country’s longest financial slump in 100 years continues.
Between April and June this year Britain’s economy shrank by 0.2% according to the National Institute of Economic Research (NIESR). The announcement has increased fears among analysts that the UK will not recover from the second recession until at least autumn 2013.
Sir Mervyn King, Bank of England governor said: ‘The economy has basically been flat for two years and doesn’t show a great deal of signs of impending recovery.’
The governor warned that meltdown in the Eurozone was the ‘biggest worry’ for the global economy and accused European leaders of failing to get to grips the financial crisis and adopting a dangerous policy of ‘kicking the can down the road’.
He said: ‘There is a great black cloud of uncertainty hanging over businesses all around the world. The result is until they know how this situation is going to be resolved they are holding back from investment and spending.’
The announcement by the NIESR has overshadowed reports from the Office for National Statistics that exports climbed by 7.8% in May, as a result in demand rising for British made cars in the USA, China and Russia.
The Spring shrink in the economy is the 3rd consecutive decline of the second recession is partly attributed to the disruption caused to the UK because of the Diamond Jubilee, and an extra bank holiday which impacted Britain’s production.
The financial slump is has now lasted for 53 months, far longer than the great depression in the 1930’s which lasted for 48 months. It is the longest financial slump in the last 100 years. The last double dip recession was in 1975.