Austerity is really working wonders, isn’t it? The widely predicted - at least on SEJ and other progressive outlets – severely negative impact on growth of this nonsensical austerity politics is becoming clearer and clearer. Since today, the UK is officially in a double dip recession. BBC News reports:
The UK economy has returned to recession, after shrinking by 0.2% in the first three months of 2012.
A sharp fall in construction output was behind the surprise contraction, the Office for National Statistics said.A recession is defined as two consecutive quarters of contraction. The economy shrank by 0.3% in the fourth quarter of 2011.
Wednesday’s figure is an early estimate and is subject to at least two further revisions in the coming months.
The ONS said output of the production industries decreased by 0.4%, construction decreased by 3%, and output of the service sector increased by 0.1%.
Some have questioned the validity of the ONS’ figures, particularly on the construction industry, which has been volatile in recent quarters.
But Joe Grice, chief economic adviser to the ONS, said the construction data was based on a survey of 8,000 companies and had been carefully compiled.
Shortly after the data was released, the pound fell half a cent against the dollar to $1.6093, and half a cent against the euro to 1.2184 euros.
The UK economy was last in recession in 2009.
No doubt the government will start at today’s Prime Ministers Questions to explain the situation away and – I make a prediction now about two hours before the event – that the Eurozone crisis will also be blamed, even though only 13% of GDP is exported into the Eurozone and 73% of the economy is domestic. Well, never let the facts change your mind. We are all in it together after all…
All Content
Austerity kills growth. However, the UK can still be happy that it has its own central bank. Were it a EMU country, the consequences would be an even more irrational austerity frenzy.