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Britain not sliding into triple-dip recession

Last Updated: Tuesday, January 8, 2013 - 19:09

London: Britain is not sliding into a triple-dip recession, according to a report by a leading business group that said economic conditions were more favourable in the final three months of 2012 than in the previous three.

Fears that the country's double-dip problems will intensify in the new year were dismissed by the British Chamber of Commerce (BCC), which claimed an improvement in employment rates and even predicted some growth.

The quarterly report from the BCC found that economic conditions were more favourable in the final three months of 2012 than in the previous three months, and said the next two years would show modest growth.

"Fears that the economy returned to negative growth in the fourth quarter are not supported by our survey. The economy will record modest positive growth in the fourth quarter of 2012," David Kern, the BCC's chief economist, said.

The BCC's quarterly economic survey, which covers 7,662 businesses, also points to stronger output from the manufacturing and service sectors in the last quarter of 2012 and overall marked improvement in business confidence towards the end of last year.

Recent surveys had suggested that the British economy could contract in the fourth quarter, with a further decline in the current period confirming a return to recession.

The Bank of England also expects the economy to shrink in the fourth quarter of 2012, adding to worries that the UK may lose its triple-A credit rating.

But the latest BCC survey indicates certain resilience within the British economy, with bigger companies performing more strongly than small and medium-sized ones.

John Longworth, director general of the BCC, added, "Our survey results show the economy is making progress, despite the numerous challenges it has faced. The UK economy will continue to face major obstacles as we head into 2013, and every effort must be made to kick-start growth."

Meanwhile, the crisis within the eurozone intensified as the unemployment rate hit a new all-time high of 11.8 percent in November 2012, according to official figures released on Tuesday.

Spain, which is mired in deep recession, again recorded the highest unemployment rate, coming in at 26.6 percent.

More than 26 million people are now unemployed across the European Union.

The EU has struggled in recent years as governments grapple with sovereign debt levels.

Japan has now stepped in with the offer to purchase bonds issued by the eurozone's permanent bailout fund to help foster financial stability in that region.

The European Stability Mechanism (ESM) plans to issue securities on Tuesday for the first time since it was launched in October 2012.


First Published: Tuesday, January 8, 2013 - 19:09
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