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The V shaped recovery seems further away than ever

While a number of government ministers have privately talked about hopes of a V shaped recovery in the UK economy, which effectively means a strong bounce from the bottom, these hopes are slowly fading day by day. The recent forecast of economic growth in the budget has been shown to be overoptimistic at best and politically motivated at worst with even the Treasury Department itself publishing data which contradicts Gordon Brown and Alistair Darling's thoughts.

The problem for the UK government is the fact that with economic growth set to take some time to pick up this will place more and more pressure on the public sector budget and will see UK national debt reach levels never seen before. Talk of a £3 trillion national debt was ridiculed some time ago but unless we see a significant bounce in the economy we could see at least £2 trillion in the short to medium term.

When you consider that the UK banking system is still struggling, first-time buyers appear to be leaving the property market, businesses are still struggling and UK consumers have had their first taste of tax increases, the situation does not look good in the short to medium term. Maybe the best we can hope for is a W shaped recovery or a gradual rise in due course.

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