Wednesday, April 25, 2012

UK Falls into Double Dip Recession

 UK Prime Minister David Cameron

Between now and the election in November we may have a somewhat rough controlled experiment for the  Obama Administration's conscious strategy of postponing deficit reduction efforts until the economy has fully recovered. The United Kingdom has adopted the GOP approach of addressing the deficit by austerity measures at a time of fragile post-recession growth.  Today the UK's Office of National Statistics (ONS) announced that the UK had slipped into a double-dip recession in the first quarter of 2012.

The reaction of the head of the Labour party, Ed Milliband?  See the video below of Prime Minister's Questions today in Parliament:  Milliband, quoting a member of Cameron's party: "The complacent arrogant posh-boys just don't get it."

The UK's recovery from this recession has been slower than its recovery from the Great Depression.  Here is a chart from the UK's ONS:

Three more charts.  The first compares the recovery from the recession in the UK, US and Germany:

Here is the chart of the U.S. recovery from the Great Recession of 2008 which shows quarterly GDP figures.  The U.S. GDP for the first quarter of 2012 is expected to drop to 2.5% from 3% in quarter IV of last year.

Here is the chart of the UK recovery showing quarterly GDP figures through the fourth quarter of last year:

The announcement today was that the first quarter of 2012 had seen the UK GDP contract by .2%. 

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