Is the UK poised to dip back into recession?

Date: 3rd November 2011

Small business owners operating in the UK could well see the country fall back into recession in the near future.

That is according to the latest report by the National Institute for Economic and Social Research (NIESR), which said that unless there is a change to the "muddling through" approach currently applied to the eurozone crisis, there is a 70 per cent chance of another recession.

However, somewhat unnervingly, even if a resolution to Europe's economic woes can be found, the UK still faces a 50 per cent chance of falling back into recession, the body claimed.

Jonathan Portes, director of the NIESR, said: "There is a weakness in demand from both consumers and investors, but the main downside risk is from the eurozone crisis.

"The impact of the government's tough fiscal policy has been negative. Going forwards, they should loosen policy moderately to help growth."

Mr Portes' forecast comes as G20 leaders meet to discuss the ongoing economic challenges faced by most of Europe at a meeting in Cannes, France.

Posted by Thomas Fletcher