Chancellor George Osborne blames the UK economic situation on the eurozone crisis. Writing in the Telegraph last month, Osborne said:
[O]ur recovery - already facing powerful headwinds from high oil prices and the debt burden left behind by the boom years - is being killed off by the crisis on our doorstep. [... A] resolution of the eurozone crisis would do more than anything else to give our economy a boost.So what chances are there of a recovery in growth in second half of 2012?
GDP figures for second quarter of 2012 to show ongoing double-dip recession?
The preliminary estimate for growth in the second quarter of 2012 is published two weeks today (on Wednesday 25 July 2012).
On balance, economic forecasters expect that a third consecutive quarter of negative growth is the most likely outcome, thereby sustaining the double-dip recession.
Prospects for UK economic growth
Economist David Blanchflower is dubious as to the theory that growth in Q2 2012 could benefit from an "Olympic bounce" from deferred Olympic ticket sales revenues, as he explained to me via Twitter last month.
Here is a round-up of recent UK growth forecasts:
- The British Chambers of Commerce (BCC) sees a high risk of the double-dip recession continuing: "Growth in Q2 2012 is likely to be zero, or even slightly negative, due to the additional bank holiday for the Diamond Jubilee. But UK GDP growth is set to improve from Q3 2012."
- NIESR: "The UK economy has ceased to contract, but economic activity remains very weak. With the economy stagnant, the negative output gap is likely to widen further. We expect the UK economy to remain broadly 'flat' over the next 6 months. While significant downside risks persist, we expect economic recovery to begin to take hold in 2013. [...] We do not expect output to pass its peak in early 2008 until 2014."
- RBS analyst Ross Walker says the manufacturing sector has suffered "a collapse [..] a huge decline" over recent months. Walker believes this will hit growth in the wider economy.