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GDP figures indicate recovery could take some time

GDP figures released for the UK economy today show a 0.8% fall in the second quarter of 2009 which is significantly higher than the 0.3% contraction expected by analysts. While the fall is less than the 2.4% in the first quarter of 2009 it does bring the annual decline to a massive 5.6% and underlines the fact that the UK economy is in crisis.

Despite the fact that the UK government, in conjunction with the Bank of England, has reduced UK base rates to 0.5% and spent £125 billion on a quantitative easing program there appears little reason for joy at this moment in time. The figures were not well received on the currency markets and sterling continues to trend downwards, which is a concern. These are the worst figures for the UK economy since 1955 when records began and could impact on investor and consumer confidence which is already fragile.

As we have mentioned are numerous occasions, at this moment in time it seems that the UK economy receives one positive report and two negative reports. Each time it looks as the economy has turned for the better suddenly we are reminded that this recession is the deepest we have experienced for nearly 100 years.

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