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Recession looms as growth stalls

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By Lee Wild

Date: Friday 22 Aug 2008

LONDON (ShareCast) - Britain is edging closer to recession, after fresh data showed the economy ground to a halt between April and June.

Growth during the second quarter was the same as in the first three months of the year, revealed the Office for National Statistics, which previously estimated growth of 0.2%.

Calls for a cut in interest rates grew louder as worries that the UK will sink into recession intensified. The technical definition of a recession is two consecutive quarters of negative growth.

Annual growth came in at its weakest since the end of 1992, having been revised down to 1.4% from 1.6%.

The British Chambers of Commerce warned Monday that more than 2m people could be out of work within a couple of years as the UK slips into recession.

The BCC predicts that the next few quarters could see either zero or negative growth in the UK, forcing companies to shed between 250,000 and 300,000 jobs over the next two to three years.

Today’s numbers had the services sector growing at a measly 0.2%, while output from the manufacturing sector dropped 0.8%.

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