'Triple Dip' Recession Fears In Markit Survey
There are fresh fears that the UK economy is sliding towards a triple dip recession this year after output slipped in the final quarter of 2012.
Output contracted by 0.2%, according to an eagerly awaited indicator for the economy.
The Markit/Cips Purchasing Managers' Index (PMI) survey for December found that activity in the powerhouse service sector shrank for the first time in two years.
The index suggested that the economy as a whole has slipped back into contraction during the last three months.
Markit/Cips said the figures, combined with mixed manufacturing and construction figures earlier this week, suggest Britain's economy suffered a bigger drop than most other private sector forecasts.
"The first fall in service sector activity for two years raises the likelihood that the UK economy is sliding back into recession," Markit chief economist Chris Williamson said.
The figures dampen hopes of recent upbeat surveys and official services data for October that Britain would be able to power out of a fourth-quarter contraction.
A fresh fall in GDP, just three months after Britain officially emerged from its second recession since the global financial crisis, would undermine Government economic policy.
"The data today on the services PMI are quite discouraging," Societe Generale economist Brian Hilliard said.
"This is quite worrying. It does suggest that as we come to the turn of the year the economy's been losing momentum, so it doesn't augur well for growth.
"I think (the data) will make it clear to the Bank of England that they should consider more easing, but the point is in the short term at least it's coming in the form of the Funding for Lending scheme and the data on that are quite encouraging."
Markit/Cips said the PMI dropped to 48.9 in December - its lowest level since April - from 50.2 in November.
It is the first time the index has fallen below the 50 mark that separates growth from contraction since December 2010, when unusually heavy snow disrupted many businesses.
Separate BoE figures released on Friday morning showed the biggest monthly rise in mortgage approvals since January 2012.
The bank said mortgage approvals reached 54,036 in November, up from 53,071 in October.
Before the financial crisis in 2008 monthly mortgage approvals ran at around 90,000 and were a major driver of consumer spending.
what do you think?
This is not a recession at all - it is a depression. 1930s revisited.
Brian. You get that impression. We seem to get one or two quarters of miniscule growth and then its back into the red. Since the financial crash we seem to hve bumped along the fine line between growth and recession and if thats not a depression I don't know what is
And taking into account the usual massaging of the figures, the truth is probably worse. Osbourne's austerity, combined with an increasingly larcenous tax regime is keeping the country on it's knees.
For God's sake!! Will these doom and gloom mongers ever give up?? I am sick of hearing these so called "Experts" basing their "Opinion" using words like "Could" "Should" and "I think"!!! An "Expert" is an "Expert" for a reason. It's because he "Knows"!!!... And everyone on the street knows that what we need is "Encouragement" And NOT "Discouragement"!!! Thank God people like these were not around running the country during the war years because they would have just put their hands up at the first sign of trouble and we would all be speaking German!! Thank God that the people on the street are managing to keep their heads held high and doing what we Brits do best in solving another mess that the so called "Clever People" created in the first place...........GETTING ON WITH IT!!
You are right about experts. Whenever I see the words "Could, Should or may be etc" my immediate reaction is Ah they don't know, they are just guessing
It stories like this that make things worse and scare people from investing or expanding
Who you gonna call.... Max Kieser!
This is not a recession !! Neither is it a depression !!! As with all other countries of " The Bilderburg Conference " we are gradually being conditioned to make do with less in order that the less well off countries of the World may have more. It appears to be working that way with China, India and South America but Africa !!!! OMG, if our government wants to equalize us with them --- ? Of course a certain few are exempt ( you can probably see who they are; Celebs, Bankers, First Division Players etc. ) if you are not one of them, transfer your votes to a Non-Bilderburg party.
But the powers that be will probably rig the election anyway so ! what the hell.
Im sure we talk ourselves into reccession.
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the only positive,s we have are how negative the governments attitude and policies are.
These meerkat surveys just arent helpful are they.lol.