UK economy to shrink in 2012 as quick austerity hurts

August 3, 2012 02:17
1 minute read.


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

LONDON - Britain's economy will shrink this year and any meaningful recovery will remain elusive until 2014 as the euro zone debt crisis and the government's spending cuts weigh heavily on the country's prospects, a leading think-tank said on Friday.

The National Institute for Economic and Social Research (NIESR) said the country's output could have been 239 billion pounds higher in total between 2011 and 2021, had deficit reduction been postponed by three years.

NIESR's analysis together with its forecast of a decline in gross domestic product by 0.5 percent in 2012, followed by only 1.3 percent growth in 2013, will fuel the heated political debate about the speed of Britain's fiscal consolidation.

The coalition government of Conservatives and Liberal Democrats has so far rejected calls to ease its tough plan of spending cuts and tax hikes, but the pressure is mounting after news that the country is slipping deeper into recession.

The shock drop of output by 0.7 percent in the second quarter - when one-off effects such as an extra holiday to mark Queen Elizabeth's 60 years on the throne and extremely wet weather compounded the general weakness - was the main driver behind NIESR's lower GDP forecast for 2012.

Related Content

Breaking news
August 16, 2018
Woman killed in hit and run near Havat Gilad outpost