More bad news on the UK economy this morning as a report from the National Institute of Economic and Social research claims that there is a strong chance the UK will fall back into recession.
The report says that the economy has been stagnant for close to a year now, and expects it to continue into the first half of 2012.
More interestingly it says that recent poor performance has been driven by weak domestic demand, rather than developments in the Euro Area.
It is predicting that the economy will grow by 0.9 per cent this year and 0.8 per cent in 2012 and that inflation will fall back to 2.3 per cent next year.
The economy it says will return to more robust growth in 2013.Its forecast though assumes a successful resolution of the euro area crisis.
It says the Bank of England’s decision to undertake another round of
quantitative easing is appropriate but adds that this will not address the fundamental drag on business investment and uncertainty with regards to future aggregate demand.