Growing fears of a double-dip recession

 

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The Independent Online

Almost two-thirds of Britons believe the UK is heading for another recession, according to an opinion poll that will cause alarm at the Treasury.

ComRes, which has been running a monthly survey about the economy since last October, found that pessimism about Britain's prospects increased to a record high this month. Almost seven in 10 people (69 per cent) think that the state of the economy has worsened in the past three months.

With the economy growing at a feeble 0.2 per cent between April and June, some 63 per cent fear there will be another downturn in the next year – the Government's nightmare scenario of a double-dip recession. There are growing fears in Government circles that the eurozone crisis could push Europe into a double dip – and that Britain would not be immune from it, demolishing George Osborne's claim that the UK is a "safe haven".

Also worrying for the Chancellor is the ComRes finding that 54 per cent of people are cutting back their own spending now because they believe there will be another recession soon. That will increase fears of a vicious circle in which consumer spending is too low to kick-start a sustained recovery.

The survey of 2,026 adults suggests the gathering gloom could have political implications. Two in three people (65 per cent) think that, if the economy does not pick up very soon, the Government should reconsider its planned spending cuts. Some 59 per cent believe the Coalition is cutting too much and too quickly, while 30 per cent back the scale and pace of the cuts. Only 30 per cent think the Government is going about reducing the deficit in a fair way.

Next week Labour is expected to launch a full-frontal assault on the Government's "inaction" on the economy. Senior Labour figures believe Mr Osborne is vulnerable to the charge of failing to bring forward a credible growth strategy to combat the impact of the problems in the eurozone and the United States. He has promised to announce measures to boost growth in the autumn.

Angela Eagle MP, the Labour Treasury spokeswoman, said yesterday: "We need a balanced plan that puts jobs and growth first."

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