Experts warn the UK is edging near recession

Aug 6 2008 by Babette Decker, The Journal

A SHARP fall in manufacturing output during June meant the UK economy may have grown by just 0.1% in the second quarter this year.

The possible downgrade from the 0.2% estimated by the Office for National Statistics at the end of July would represent the UK’s worst quarterly growth figure since the second quarter of 2001.

Economists scaled back their forecasts after manufacturing output slid 0.5% in June, compared with expectations for a modest increase. The wider measure of industrial output, which includes oil and utilities production, fell by 0.2% month on month and by 0.8% over the quarter.

The figures reinforced expectations in the City that the UK faces a period of recession, defined by two consecutive quarters of negative growth.

Ben Read, senior economist at the Centre for Economics and Business Research, said: “These figures will do nothing to quell fears that the economy is sliding towards negative growth.”