Is the UK to avoid a triple-dip recession?

Enable Independent, Independent Financial Advisors in Bishop’s Stortford are pleased to see that it looks as though the UK economy is going to avoid going into a triple-dip recession. Distorted figures, negative media coverage, always make it difficult to predict, but apart from the UK losses in the North sea oil industry, it looks as though the UK economy might be in better shape than previously thought.

According to Ian McCafferty, a newly appointed MPC policy maker, he feels that the economy is improving, and that lending and tackling inflation are the most important considerations this year. He has also stated that economic growth will pick up pace later this year.

He said that he feels "hopeful for the UK economy through 2013 and into 2014". He continued to say that he expects to see modest improvement in GDP, as some of the negative factors that have been creating a stagnant economy have started to fade: "Overall, I am hopeful for a modest pickup in growth as some of the negative factors that have made the last couple of years so difficult start to fade, and as levels of confidence, so badly battered by the impact of the euro crisis, start to heal," he said.

Many leading economists, such as Stephen King, the chief global economist as HSBC, advised against throwing too much money into the economy to stimulate growth, stating that the economy was going in the right direction. Other prominent economists have said that the overall economic growth much stronger than the gloomy reports. 

McCafferty stated: "If we adjust overall GDP growth for the sharp falls in construction and North Sea oil output, the rest of the economy – over 90% of GDP – grew by 1.2% last year. I do not wish to sound complacent; growth of even 1.2% across much of the economy is still at best a slow and difficult recovery. But it is also somewhat removed from the reports of semi-permanent, triple-dip recession."
But he did say that the outlook for inflation, which has been above the Bank's government-set target for years, was "more concerning" and that it is expected to "remain elevated for much of the next two years".

It will be interesting to see later today, if McCafferty predictions of avoiding a triple-trip recession are confirmed.