As we recently noted, many economic commentators continue to warn of a "double-dip recession". One such scenario is a "W-shaped" recession, in which economic growth declines then returns to recovery, only to dip back into recession again before at last making a full recovery.
Times business editor David Wighton explains how a "W-shaped" recession could easily emerge from the current circumstances (external website), and the critical role that unemployment will play. According to Wighton:
[E]ven assuming that private sector unemployment peaks in the middle of next year, we might then be hit with the threat of widespread job losses in the public sector as the new government seeks to control the ballooning deficit. That could easily knock the wind out of consumer confidence, propelling us down the third leg of the W.
A still more troubling scenario is depicted by the Ernst & Young ITEM club, which argues that the UK economy is set for a protracted "VW-shaped recovery" (external website).
Martin Sorrell of the WPP advertising agency, meanwhile, proposes a more elaborate range of metaphors for recovery. Sorrell predicts that the global economic recovery will be "LUV-shaped" (external website) (comprising an "L-shaped recovery" for western Europe, "U-shaped" for north America and "V-shaped" for the other major world economies).
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