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Wednesday, April 25, 2012

Is Double-dip recession in United Kingdom?

After early-seventies, United Kingdom seems to be again falling into the clutches of double dip recession.
In double-dip recession, recession again continues after showing some signs of the recovery.
Last two quarters of the financial year 2012 saw contraction in the GDP.
Euro-zone, which is reeling under sovereign debt problems, happened to be the largest market for the UK and financial crisis there came heavily on the GDP growth of the UK.

Besides this, domestic consumption in the UK is dwindling too in the wake of rising crude prices, UK government’s cost-cutting measures and almost-stagnate salaries of the UK citizens.
To spur the economy BOE (bank of England) shall come up with the quantitative easing to the tune of 40 billion US dollar or 25 billion UK Pounds.
Quantitative easing too is not a panacea and has got its side effects like inflation and currency devaluation.


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