Recession fears grow as economy hits standstill
By William Mitting Tuesday, 26 August 2008
Fears of a recession are growing as official statistics showed that the economy did not grow in the last quarter ending a run of 63 quarters of consecutive growth.
Figures released last week by the Office for National Statistics revealed an annualised growth rate of just 0.2%, with zero growth recorded for the three months to June, prompting some economists to predict the next two quarters will see negative growth.
Print and packaging specialist Nicholas Mockett of private equity house Europa Partners said: "We are in a vicious cycle of stagflation. We have stagnant growth and rising inflation, this is a terrible position to be in as the economic levers that are normally pulled to rectify each problem would make the other one worse.
"It's difficult to predict an end to this, but it is likely to be several quarters at the very least."
The dire statistics comes as the new deputy governor of the Bank of England, Charles Bean, warned that the economic slowdown would "drag on" saying the global financial challenges currently faced were on a par with the 1970s.
Print is among the first industries to feel the effects of a recession as companies cut down on advertising spend to reduce costs.
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