The double dip recession has been the big economic news of this year – and it’s not looking to get better any time soon. Figures released this week show that this is the UK’s longest double dip recession for over 50 years; while many businesses are starting to look towards recovery, there’s still a long way to go.
Britain’s GDP figures, the broadest measure of economy across the board, has shrunk 0.2% between April and June, making this the third consecutive quarter of economic contraction. A recession is defined as being two consecutive quarters of negative growth, showing that Britain’s ‘dip’ into a double dip might be more long lived than first thought. The economy entered a technical recession in the first quarter of the year with a decline in GDP growth of 0.3%, following a 0.4% drop in the last quarter of 2011.
This is the longest double dip recession since the quarterly economic records began in 1955, and could well be the worst since the Second World War. The last double dip recession dates back to the 1970s amid the miner’s strikes and soaring oil prices, but that only lasted two consecutive quarters.
The current double dip is thought to have some origin in the extra bank holiday surrounding the Queen’s Diamond Jubilee, as well as the record rainfall across the spring and summer months, impacting on retail figures. Estimates from the Bank of England have stated that the bank holiday could reduce output by up to 0.5% – figures will likely be skewed further by further big events this summer, namely the Olympics.
All of this doom and gloom surrounding economic growth is hugely impacting on business confidence, causing many firms to cut back on their investment plans due to fears of recession. However, it’s those businesses who investigate their funding options and plan for growth who will emerge from recession the strongest.