Despite the recession, UK is going to continue the austerity

The UK is officially back in recession earlier this year, following a contraction of its economy for the second consecutive quarter. A surprise to analysts, who were counting on a slight increase of 0.1% of GDP, and bad news for the government of David Cameron.

  According to an official statement published on Wednesday, April 25th, the British economy shrank by 0.2% in the first quarter of 2012, after falling 0.3% last quarter. The country had emerged from recession in late 2009.

  

This bad news follows an earlier announcement Tuesday by the government listing that public finance in the UK have deteriorated again in March, forcing the country to borrow 18.2 billion pounds (22.3 billion euros) a record since November 2010.

  

Even after the announcement of the recession, the British Finance Minister George Osborne confirmed the continuation of the austerity policies of his government.

"The only thing that would further accentuate the situation would be to abandon our program that is credible, and deliberately increase our deficit and create more debt," Osborne said in a statement.

The Conservative minister admitted that the UK was in a "very difficult economic situation" but stressed that it was even more complex than "so many other European countries are already in recession or are in the process of falling into it. " "It takes more time more than expected to pick ourselves up the largest debt crisis we have had in living memory," said the Chancellor of the Exchequer.

The POUND, on a free variation: Leaded by the announcement of this back into recession, the pound sterling off again sharply lower against the euro and the dollar. By mid-morning, the British pound, fell to 82.09 pence per euro, its lowest level for a week.

 Yet, yesterday, the pound had risen by 81.44 pence per euro (its highest level since August 2010) carried by a movement initiated last Wednesday by the fact that the Bank of England seemed to push new measures to support the economy.

Such measures, result in liquidity injections, have the effect of diluting the value of the pound.

Does Uk need a new Margarett Thatcher ?

-Adnen Ben Haj-

Posted in: All econimics