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This week's announcement of the Marks & Spencer sales figures for the Christmas and New Year period is set to disappoint the market and will be accompanied by a rumoured 1000 job cuts. Those...
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Thursday 28th August 2008
City analysts today warned the government that the British economy is set to witness a recession which could last up to 18 months. Capital Economics predicts that the gross domestic product for the UK will fall for the first time since the recession of 1990, down by 0.2%. However, it has also been warned that these predictions may be fairly conservative ones – with analysts preparing for even larger declines. This possibility has been described as a “full blown slump” by City analyst Vicky Redwood, economist with Capital – a worrying forecast for the already struggling British economy. The recession is likely to be caused by the increasing refusal of banks to lend money, or cutting how much they lend, both on an individual and corporate level.
The recession is likely to be characterised by financial distress across the country, including corporate collapse and widespread redundancies. The blame for this has been firmly placed on the Government, with a leading analyst at investment firm Hargreaves Lansdown saying that “you need money to spend your way out of a recession. But the Government hasn't got any, as it has been borrowing so much for so long and the banks haven't got any money because of the mistakes they made which led to the credit crunch. Things are not looking good”. It seems the Government will have a hard time ahead of them in order to resolve the crisis.
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