Britain on brink of a double-dip recession

Forecasters are predicting a second slump in GDP during a bleak winter, with output thought to be 10pc below 2019 levels

Pound line

Britain is on the edge of its first double-dip recession in almost half a century as the second wave of lockdowns threatens the “final straw” for businesses.

Forecasters are predicting a second slump in GDP during a bleak winter, prompting appeals for Rishi Sunak to keep spending to keep the economy on life support.

Analysts said there is a real risk the economy could slip back into recession if efforts to curb the spread of Covid are unsuccessful, the first double dip since the 1970s.

George Buckley, economist at Nomura, warned the UK will suffer a “lopsided-W shaped recovery” with a “second, but smaller, dip in GDP over the winter months” as data on Friday suggested the economy is fast losing momentum. Output is thought to be 10pc below 2019 levels.

Consumer confidence has hit an all-time low in recent weeks, according to Bank of America, while David Miles, a former Bank of England ratesetter, said another downturn may be the “final straw” for many firms.

James Smith, research director of the Resolution Foundation, said: “It wouldn’t surprise me if the fourth quarter was a contraction on the quarter, so there’s definitely a risk you end up in a double-dip recession.” The first quarter of 2021 would also be threatened if tougher measures to curb Covid were needed, he said.

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