This week we got what should have been monumental news that the UK is officially in recession. The specific definition being used for this headline isn’t particularly useful however. Most people would associate a recession with rising unemployment, something we have yet to see. So far belt tightening in the retail sector is dragging down growth figures thanks to poor Christmas sales but if it keeps up, we can expect job losses eventually. That the last six months haven’t exactly been great for the UK economy should come as no surprise to anyone.
Elsewhere the mood is likely more upbeat over at the Bank of England. A recession is the best known cure for inflation and they’ve been trying to cause one ever since they started jacking up interest rates. How bad things need to get and for how long before they’re satisfied will be questions they’ll need to answer. In an election year this could be a boon to Labour who can now blame the government for causing a recession, but there is every chance the figures could be revised up in a few months and the Conservatives will take the credit for a recovery so it’s probably a wash.
For the following stories, please click on this link*
- Inflation: Markets choppy as UK and US send different signals
- UK: Enters recession as wage growth remains strong
- Equities: Big brands warn that consumers are more cautious
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