The U.K. office of national statistics has released its latest numbers on the declining GDP in Britain. As I expected they continue to be starkly negative. The UK economy continues to shrink so that Britain has now experienced a clear double dip recession. Growth has been negative over the past three quarters. The latest numbers suggest that the economy shrank by 0.7 % in the second quarter of this year. Since there was an extra bank holiday in honour of Queen Elizabeth’s Diamond Jubilee the decline in real terms is slightly smaller. But nonetheless the data is not good, a sharper decline than most economists anticipated and delivers a very negative grade to the misguided austerity policies of the Chancellor George Osborne.
A full scale turnabout on policy is needed to prevent the situation from worsening further. It cannot be just further quantitative easing but state sponsored job creation and infrastructure and environmental enhancement investment of a substantial size. Plus there must be pressure on cash rich corporations to start hiring rather than hoard their cash.