The British Prime Minister and his chancellor George Osborne received very unwelcome news on the UK economy on Friday. The services sector which accounts for three-quarters of the country’s economy has fallen in the last three months of 2012, paving the way for an unprecedented triple-dip recession.
The Chartered Institute of Purchasing and Supply revealed that services dropped for the first time in two years. Economic forecasters have commented on the survey, describing it as undeniably disappointing.
At the beginning of this year, the Government was optimistic that their financial plans would help the economy grow and get the country out of recession. But they have now been proved wrong, as the index shows the country is falling deeper and deeper into recession. If things don’t improve in the next few months, the country will suffer a third recession in five years.
Economic experts believe the government needs to stop fooling everyone and change their financial strategy.
Activities in the service sector include areas such as banks, education, social work, transport and communication - services that the UK relies heavily on boosting their GDP. But a drop in these services could continue in 2013.
One financial expert said: "…the fact that incoming new business dropped for a second successive month suggests that underlying demand remains very weak and that activity may continue to fall in the new year."
The affects of the recession can be felt throughout the working sector. A decline in demand and poor trading has forced employers to shrink their work capacity, putting more people into unemployment or part-time jobs. And with a squeeze on family households and mounting debts, the country is braced for more disappointing news on the economy. Hassan Alkatib, Press TV, London.