Economics Weekly by Lloyds TSB

Not only is the UK economy in recession but there are few signs thatthe situation is improving. Final estimates for Q4 2008 show thatoutput fell by 1.6% in the quarter and was 2% lower than in the yearbefore, the largest drop in output since 1980 Q2.

Is the UK recession deepening?

Not only is the UK economy in recession but there are few signs that the situation is improving. Final estimates for Q4 2008 show that output fell by 1.6% in the quarter and was 2% lower than in the year before, the largest drop in output since 1980 Q2. In fact, economic data so far in Q1 2009 suggests that the downward momentum has gathered pace and that the fall in gdp in the current quarter is likely to be even larger than in Q4 2008. We look for gdp to contract by about 1¾% in the current quarter, to take annual gdp growth to its slowest pace since the 1980s downturn. We look at recent monthly economic data for clues as to whether this gloomy outlook is a fair assessment of recent trends.

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