United Kingdom could get through the third round of recession since the global financial crisis of 2008, an unprecedented situation that will increase pressure on the government regarding the austerity policy measures.
After the coldest March in 50 years, the GDP of Great Britain could record a second consecutive quarter of decline. In the last three months of the last year, the GDP of UK fell by 0.3% from the previous quarter.
Official data will be published Thursday and most economists estimate that the UK will be very close to the recession threshold, warning however that there are significant risks that the forecast might prove to be an optimistic one. Economists at Swiss bank UBS believe the UK economy stagnated in the first quarter, but noted that the effects of cold weather could cause surprises.
A third round of recession following the financial crisis four years ago would be unprecedented in British history, questioning the politics of austerity practiced in recent years by the government in London. An analyst at Japanese bank Nomura believes that the service sector recovery was stopped in the first three months of this year due to adverse weather conditions, which also blocked construction projects.
Retail sales fell in March in the UK by 0.7% compared to February, the effect of dropping the income of the population being stressed by bad weather that kept consumers in homes. The UK economy contracted for five consecutive quarters after the second quarter of 2008 and recorded another nine months of recession from the last three months of 2011, amid the sovereign debt crisis in the eurozone.
IMF lowered by 0.3% its growth forecast for the UK this year, due to the decline in demand, and recommended that the government considers a more flexible approach to reducing the budget deficit and public debt.
The credit rating agency Fitch downgraded Britain’s credit rating Friday from “AAA” to “AA +”.
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