Many pundits suggested that there would be a secondary recessionary wave following on from the global financial crisis and it accompanying, deep recession; the so-called “double-dip” recession. The reason for this, they argued, was that the growth that ended the initial recession was largely due to stimulus measures and not “organic”. A double-dip recession requires that the second recessionary wave starts within two or three quarters after the ending of the initial wave, but this didn’t happen as many economies limped into growth with a weak, faltering recovery.
A Historical View - and a Present One
The UK economy started to contract in the final quarter of 2011 and continued to do so in Q1 and Q2 2012, thereby entering a second recessionary wave. According to the British Chambers of Commerce (BCC), the UK economy has returned to growth in the third quarter and they are predicting growth of 0.5% when the official data is released. Their optimism is based on a survey of 7593 British firms which reported better times. BCC called on the government to take action to boost UK growth, for instance by investing in infrastructure projects and creating a British “business bank”. BCC, which represents 104000 UK businesses, is also advocating a “growth vochure scheme” which would see some 20000 small businesses offer advice worth £5000 in a bid to boost investment and expansion and therefore create jobs.
The organisation is more bullish that the Office for National Statistics on the performance of the UK economy. "Despite official estimates, we believe the economy is still growing, but it is slowing. We need immediate measures now to support confidence and investment, a radical long-term growth plan, and a continued commitment to deficit reduction," said the BCC’s chief economist, David Kern. Indeed, this view was given some support last week when the Q2 contraction was revised downward from an initial reading of 0.7% (itself revised down to 0.5%). Official figures for Q3 from the Office Of National Statistics will be released later in the month.