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UK could be headed for double-dip recession

Fears of a return to recession gather pace as US property transactions fall by 27 per cent.

Fears that the UK might be heading towards a double dip recession have gained force after property transactions in the US fell by 27 per cent in July.

The news has contributed to growing fears and international markets have subsequently witnessed chaos. The New York stock market fell below the 10,000 level and the London exchange was also down sharply, even as oil prices went into reverse and commodities declined. Ireland, Portugal and Spain also observed an incline in their borrowing costs.

Worries that the UK might be moving towards its own double-dip recession were articulated by Bank of England policymaker Martin Weale. The recent government appointee to the monetary policy committee told the Times of the risk, citing the weakness in economic recovery. He also said that ruling out the possibility of a return to negative growth was "foolish".

Weale's comments caused yields on 10-year gilts to drop to a record low of 2.88 per cent.

The US is being closely monitored for now as the UK and Europe face the dire possibility of following it back into the recession.