UK: Double dip recession and growing debt

The UK economy shrank by 0.2% in the final quarter of last year, according to the Office for National Statistics (ONS). If this trend continues throughout the first three months of 2012, then the UK will be in a recession.

The disappointing growth figures coincide with the current 17-year peak in unemployment - 2.68 million are unemployed, or 8.4% of the population. Manufacturing contracted significantly by 0.9% in the final quarter of last year too, which will have had a major impact on GDP.

It's reported that the Bank of England plans to remedy the situation with further quantitative easing. The Telegraph reports that £275 billion has already been injected into the economy this way and a further £50 to £75 billion of QE is expected in early to mid February.

The Coalition's methods to bring down the deficit have been criticised by opposition MPs, although it looks like there may be a recession throughout the eurozone and the problem won't be limited to the UK.

Personal debt is still an issue. A campaign group, 'Save Our Savers', says that consumer debt increased by £18.4 billion between November 2008 and November 2011 (excluding debts the banks have written off) and that credit card debt is currently £56.5 billion and has risen £16.1 billion over the same period.

Lucy Bower