And back we go...

Which way will we go?

Last week the UK economy was officially announced to have shrunk by 0.2% in the last three months of 2011. The announcement was a major boost to the economy which had been hoping for an upturn after the preeciding quarter had yeilded a 0.6% growth.

The fall comes amid speculations that the UK’s economy is set for another year of fluctiations a notion suported by Sir Mervyn King the governor of the Bank of England who warned the economy is likely ‘to zig-zag’.

The main contribution to the fall was the drop in business investment on capital goods causing a fall in the UK’s aggregate demand and therefore economic growth. However, on a more positive note consumer expenditure increased by 0.5% indicating an increase in consumer confidence in the market and hopefully an upturn in the future of the high-street.

Despite, this whatever way you look at these figures, this is worrying times for the UK economy. Another quarter of negative growth and another recession will be on the cards leading to the ‘double dip’ many feared at the end of 2010. Whilst, i personally don’t think we will go into another recession in three months time this is certainly a setback for the UK’s economic recovery and will only further add to the coalition governments worries.