UK set for return to recession - NIESR

The UK and Europe will both slip into recession in 2012, according to the National Institute for Economic and Social Research (NIESR).

The UK only has a one in four chance this year of avoiding a 'technical recession', defined as two consecutive quarters of contraction, according to research from the leading think-tank. NIESR has forecast a contraction in the economy of 0.1% for the year as households continue to retrench, credit conditions tighten and businesses show a reluctance to invest. However, it is predicting 2.3% growth for the following year. NIESR warned if UK unemployment remains at an elevated level for some time, it could do permanent damage to the supply side of the economy, with large long-run economi...