Chancellor
George Osborne should be hoping for a white Christmas for the UK, as
this could help the economy avoid a double-dip recession. This is
according to Steve Nickell of the Office for Budget Responsibility
(OBR).Speaking to the Treasury Select Committee yesterday (Tuesday 6 December 2011), "Nickell pointed out that heavy snowfall at the end of the year - following last year's pattern - could mean a sharp downturn in GDP, followed by an automatic bounce-back as activity returns to normal in the new year," the Guardian reports. Nickell said: "It's got to snow in the fourth quarter."
The Guardian notes that "Nickell's remarks were a stark indication of just how close to a recession the economy has come."
OBR downgrades UK growth forecasts
Economic growth is ongoing at present, but feeble. The UK economy grew by 0.5% in the third quarter of 2011, according to latest revised data from the Office for National Statistics (ONS).
Last week, the OBR published its latest downgraded forecasts for UK economic growth. The OBR expects the UK economy to grow by 0.9% over the course of 2011, with growth slowing to 0.7% in 2012. XpertHR reports:
By 2015 and 2016 growth is expected to be at 3%. Key reasons for the reduction in the OBR's forecasts include the effects of unexpected external inflation shocks - energy price and commodity price rises - which 'explains the slowdown in growth in Britain in the past 18 months.' In addition, the pre-recession 'unsustainable boom' was bigger than previously thought and the bust was consequently bigger too.
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