Britain’s ailing economy will not see progress at least for another couple of years, which could bring about a third recession and mark the economic longest recovery in a century.
Britain could be on course for its second triple-dip recession in just four years, after the economy shrank by 0.3 percent in the final three months of 2012.
According to the Office for National Statistics (ONS), a fall in manufacturing output pulled down the economy, countering a small increase in construction between October and December last year.
The figures were worse than expected and could put more pressure on the government to act on a “Plan B” that would encourage demand.
The prospects of a triple-dip recession, which will become official should the economy contract again in the first quarter of 2013, is deemed to further break down the confidence of consumers and companies that will hit high street spending and business investment.
Moreover, British Chancellor George Osborne warned cabinet ministers to be prepared for further budget cuts up until 2016, as new figures revealed he borrowed millions of pounds more than expected in December.
The ONS figures have also put Britain’s privileged AAA credit status under pressure as they showed that the economy is not recovering in line with Osborne’s hopes.