OFFICIAL FIGURES this week for Britain’s second-quarter gross domestic product will confirm the worst of the recession is over. But a report from the Ernst & Young Item club, using the Treasury’s economic model, will warn of a fragile recovery, with the threat of a “double dip” back into recession.
Second-quarter GDP figures, to be published on Friday, are expected to show the economy shrank only slightly after its record six-monthly fall in the fourth quarter of last year and the first quarter of this year.
Some economists think the figures could even show a small rise but, according to
Ideaglobal.com, the consensus among analysts is that there will be a fall of 0.3%, after drops of 1.8% and 2.4% respectively in the two previous quarters. The National Institute of Economic and Social Research, which produces monthly GDP estimates, expects a fall of 0.4%.
Signs that the economy is stabilising after its autumn and winter plunge will be welcomed – largely reflecting the start of a turnround in stocks, or inventories – but economists remain cautious.