Double-dip recession 'less likely'

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Double-dip recession 'less likely'

Fri 5th Mar 2010

Vicky Redwood, UK economist for Capital Economics, said that the economy would grow "sluggishly" even though quantitative easing is likely to be extended further this year before the government ends its stimulus and implements a 'fiscal tightening' policy.

She added that confidence in the national economy would be affected after the next general election when an emergency budget is expected to be enforced by the new government.

Speaking about the CIPS/Markit UK Services PMI, which revealed the strongest growth for three years in the service sector, Ms Redwood said that the data was positive and indicated "that the economy bounced back in February".

"Whether that continues remains to be seen but at least for now that should alleviate concerns that the economy is about to fall back into recession this quarter," she remarked.

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