Britain In Recession Again, Forecasters Say

http://uk.news.yahoo.com/britain-recession-again-forecasters-092855783.html

Britain has returned to recession, forecasters from the Organisation for Economic Co-operation and Development (OECD) have said.

Gross domestic product (GDP) is expected to shrink by 0.1% in the first three months of this year, according to the OECD , after the economy contracted 0.3% in the fourth quarter of 2011.

Sky's economics editor Ed Conway said: "It will certainly be a blow to the Chancellor who has made it rather clear that although he thinks the economy is rather weak it doesn't necessarily face the kind of crunch it did in 2008.

"However, when you look at some of the figures over the past few quarters there has been pretty much zero growth over the previous five quarters.

"Whether or not you call it a recession, and the OECD is now saying it is a recession, certainly the economy is much weaker than had been hoped for only a few years ago."

Speaking about the OECD predictions, he said: "Our own forecast from our own independent body, which was published last week, says we are going to avoid a recession.

"We will see what the data shows over the next few weeks but there have been some more encouraging economic signs in recent months."

Last week in his Budget speech , the Chancellor predicted that the economy would avoid slipping into recession.

He said the Office For Budget Responsibility (OBR) had estimated Britain would be in positive growth within the first quarter of 2012.

Mr Osborne added that the OBR's forecast for UK growth was 0.8% in 2012, 2% in 2013, 2.7% in 2014 and 3% in both 2015 and 2016.

Elsewhere, the Paris-based OECD predicted contractions in France and Italy in the first three months of 2012, while Germany would see growth of just 0.1%.

But an improving US labour market would help the world's biggest economy grow 2.9% in the first quarter of 2012, according to a report.