Are we on the verge of a double dip recession in the UK?

Over the last few months there has been renewed activity in the UK services sector, an area of the business arena which makes up 70% of the U.K.'s gross domestic product, although this week a survey from the CBI is set to show the sector has weakened again. This is a major blow to those hoping for a quick recovery in the UK economy with service companies confirming an alarming fall in sales over the last three months, which is affecting profitability.

There are now growing concerns that the UK economy is on the verge of a double dip recession, a situation which some people suggested a number of months ago but were lambasted by the vast majority of economic "experts". If the UK is indeed on the verge of a double dip recession this could wipe out the massive investment which the UK government has poured into the banking sector and the UK economy as a whole. When you also take into account the severely weakened state of the UK balance sheet, growing budget deficit and problems elsewhere in the economy, we could be on the verge of a doomsday scenario for the UK economy.

However, it is vital that we look towards the trend rather than one-off reports which can often mislead in the short-term and mask the underlying position of the UK economy. We should be concerned but there is no need to talk ourselves back into a recession!