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25 April 2012

The UK is back in recession

Cameron's week gets even worse.

By George Eaton

It just gets worse for David Cameron. The Office for National Statistics has confirmed that the UK is officially back in recession. Output in the first quarter of this year fell by 0.2 per cent, following a drop of 0.3 per cent in the previous quarter. In other words, the technical definition of a double-dip recession (two consecutive quarters of falling output) has now been met.

Following the politically catastrophic Budget, this could not have come at a worse time for government. At the very moment that voters are losing faith in George Osborne’s ability to manage the economy, the data confirms that they are right to do so. Ed Balls, who warned of the risk of a double-dip recession before any other senior politician, has been entirely vindicated.

And the economics are little better. The figures could yet be revised up (or down) but one thing is clear: there is no recovery to speak of. The worse-than-expected figures (the Office for Budget Responsibility forecast growth of 0.3 per cent) mean that Osborne will be forced to borrow even more, further damaging his reputation and imperiling the UK’s cherished AAA rating. The Chancellor will, inevitably, pin much of the blame on the eurozone crisis but the inconvenient truth is that growth evaporated long before the current troubles.

As for Cameron, with PMQs and Rupert Murdoch’s appearance at the Leveson inquiry still to come, the worst day of his premiership has barely begun.

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