UK will escape 'double dip', predicts OECD

Britain will experience a slowdown in her economic recovery but escape a "double dip" relapse into recession, says the Organisation for Economic Co-operation and Development (OECD) – the "club" of all the world's advanced economies.

But while the US, Japan and Germany are set for expansion after their severe slumps, China and Brazil, hitherto two of the emerging markets' most boisterous powerhouses, are showing signs of a decline in growth.

The OECD's assessment of key "leading indicators", such as surveys of consumer confidence and business sentiment, reveals the UK will experience a "moderate downturn" and a flattening out of growth over the next year or so.

So far this year UK economic growth has confounded the critics by coming in at about double expectations. At 1.7per cent over the first three quarters, growth has already exceeded the latest consensus growth forecast among independent economists as well as the Office for Budget Responsibility's projections. The OECD sees that slowing down markedly next year, though staying in positive territory and avoiding outright recession. The Bank of England presents its latest definitive view of the economy in its quarterly Inflation Report tomorrow.

The OECD's leading indicator for the UK fell for the sixth successive month in September, from a peak of 103.8 in March to 103.0 in June, 102.7 in July, 102.6 in August and an 11-month low of 102.4 in September. A reading above 100 points to expansion but a reading above 100 and declining points to a downturn. The UK leading indicator has been above 100 since September last year.

More worrying for the world, though, is the reading for key emerging markets China and Brazil, pushing below the long-term trend and, says the OECD, "implying that the level of industrial production will fall below its longer-term trend in these two economies", though that trend is a very robust one.

Among the other large economies, the OECD says there are signs of "continuing expansion" in Russia and of moderate downturns in Canada, France, India and Italy. In the distressed eurozone periphery, Ireland is due for a sharp recovery, Spain for stagnation and Greece for more contraction.

Howard Archer, the chief economist at forecaster Global Insight, said: "Economic activity still seems set to be seriously pressurised over the coming months by major fiscal tightening, notably including VAT rising in January.

"Given this backdrop, we do not expect the Bank to raise interest rates before the fourth quarter of 2011."

Suggested Topics
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech

Board creates magnetic field to achieve lift

News
There have been various incidents of social media users inadvertently flouting the law
news

Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
News
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
i100
Sport
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London