The contraction in GDP in the final quarter of last year means that the economy may have entered a triple-dip recession. This downturn now looks even more dismal by previous standards. Admittedly, the economy was pulled down by temporary factors, including the unwinding of the Olympics boost and the closure of a key North Sea oil field. What’s more, the news since the start of the year has been more positive. Nonetheless, the surveys are consistent with only flat GDP, meaning that a return to recession remains possible. Even if a triple-dip is avoided, we expect the economy to do little better than stagnate this year.
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