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When did the UK recession officially start to kick in?

The Office for National Statistics has today stepped in to correct UK economy growth figures which were issued in 2008 which now seem to indicate a downturn in the second quarter of 2008. The new figures show there was a marginal downturn in the second quarter therefore the UK recession officially started three months earlier than originally thought. This is something of an embarrassment for the UK government as the Chancellor Alistair Darling had suggested back in the first half of 2008 that any UK recession would be short lived.

The 1.9% fall in Britain's annual gross domestic product in the 12 months preceding the fourth quarter of 2008 is actually on a par with the fall in the UK economy throughout the recession of the 1990s. This means that even though we are still in the relatively early stages of the UK recession, the damage to the UK business arena has already matched that of the full 1990s recession. So how bad can it get?

While the headline retail price index indicates that inflation is around about the 2% level there are two other inflationary indexes used to calculate the cost of living and these are hovering around about the 0% level. It is inevitable that both of these relatively unknown measurements will fall into negative territory next month and there are serious concerns that the retail price index could soon move below 0%.

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