They contend that if the government were able to save as much as £123 billion during the next seven years, the government would still need to raise taxes or increase spending cuts which would be equal to a little over 1pc of the GDP. In today’s market, that is equal to about £17 billion annually. It would take at least this amount to bring the national debt back to where it was before the debt crisis.

However, if these figures seem grim, consider the fact that the public sector net debt could decline from 74% of the GDP which is forecast for the 2016-17 fiscal year to perhaps 57pc in the middle part of the 2020’s and then by the early part of the 2060’s the public sector debt will reach a level unprecedented to 89pc of the GDP. As bad as that sounds, this is a far cry better than what had been projected last year where analysts said the public sector debt at that time would be as high as 107pc of the GDP.

Last year in his autumn statement, Osborne said that he believed austerity would need to be held over at least another two years but in reality, it will be several decades before the UK can lift itself out of debt.

Not only did jobs in the United States not grow as expected, large emerging markets such as China have slowed as well. It had been forecast by the IMF back in April that 2012 would see a growth of 3.5pc whilst 2013 was projected to be at a growth rate of 3.1pc.

Unfortunately, within the past two months many global economies have stalled or deteriorated and as stated, United States and Chinese jobs creation has not met up with expectations. Within the next week or two the IMF is expected to release an assessment of growth which will have been updated to reflect these unexpected slowdowns.

Part of the basis for a reassessment is in the fact that US jobs only grew by 80,000 last month as opposed to the 90,000 which had been projected. Although it was higher than the previous month’s creation of 77,000 jobs, it is much lower than had been anticipated. When large global economies do not produce as projected, this has a dire impact on economies around the world.

Given the fact that this is much lower than the pre-crisis average of monthly growth, it is believed that the US Federal Reserve will implement another stimulus package to try to give the economy there a boost. It appears as though an unexpected rise in jobs earlier in the year gave false hopes and now these new fears are rippling through global economies, especially in the UK and the eurozone.

With Germany standing strong against further help for the troubled EU and confidence down, it appears as though worries for the global economy are well founded. Spain and Italy are the two countries which are currently causing a great deal of concern in the eurozone and France is right there amongst them. Even Germany’s bond yields have turned negative which will probably also be reflected in the IMF’s updated assessment.

The Monetary Policy Committee acted after the Bank’s Governor, Sir Mervyn King, stated in previous days that he was in shock over the state of financial affairs in Britain and how they had degenerated continually within the past half year. This was revealed during the twice-yearly Financial Stability Report which had been made public the previous week.

According to economists, the UK economy is continuing to shrink and perhaps in the best case scenario, remains flat as of the second quarter of 2012. This would mean that the final quarter of last year as well as the first two of the current year have been mired in recession and does not bode well for prospects in the near future. Although there is no actual way to define a ‘depression’ which can be agreed upon within the UK or in other countries, it is generally labeled as such when a country sustains a recession for at least two years in a row.

Even so, this new round of QE is not expected to provide great yields but may boost confidence a bit. The Deputy Director General of CBI states that the UK should also consider alternatives such as investing in “high grade corporate paper and bank bonds.” He further contends that although this isn’t the final solution, it will give a boost to some businesses during this difficult time.

Lloyds of London has recently announced that they have minimized their exposure to the ongoing problems with the single currency. At the heart of the matter, there is a contingency place to switch to multicurrency underwriting should Greece exit the euro zone. According to an interview given to The Telegraph, Richard Ward stated that Lloyd’s of London may lose a percentage of their £23.5 billion portfolio of investments if the euro zone collapses.

Other credit insurers in Europe also are reducing their exposure, specifically Euler Hermes that recently announced they would be reducing Greek trade cover because there is a high risk they will exit the euro. Of course, much is contingent upon the upcoming elections Greece because there is a great deal of uncertainty over the outcome of the pro-austerity versus anti-austerity factions.

In the words of the Deutsche Bank’s co-chief executive, Juergen Fitschen, Greece is a country ruled by politicians who are corrupt and is a “failed state.” CEO Ward of Lloyd’s of London is amongst the first major business leader in the UK to admit that the euro zone is in such great crisis and the outcome could significantly put a damper on the UK economy.

All signs are indicating that other large financial institutions and insurers are planning for contingencies because they believe Greece will exit the single currency. If and when this happens other member states of the euro zone are expected to also collapse. The market indicators are there which is causing further concern within the international community.

Unfortunately, it doesn’t appear as this is going to happen at any time in the near future and pressure is mounting from the international community for Greece to reach some sort of decision and stop their stalling tactics.

On the very same day that Friedrich released his statement, Christine Lagarde said that it is time for Greeks to face paybacks. Ms Lagarde, IMF chief, says that Greeks have been dodging taxes and having a grand time at the expense of international bailout money.

She feels that children in Africa who are keen on getting an education yet sit three to a chair are far more deserving of international funds and would appreciate it so much more. Not only does Ms. Lagarde cite the Greek government for being too lax on collecting taxes but she blames Greek citizens for tax avoidance.

Parents in Africa would be thrilled for the opportunity to educate their children whilst parents in Athens do everything in their power to avoid paying their fair share of taxes – one of the main reasons why the Greek government is in such dire straits.

Not only is Germany refusing further aid as the largest economy in the eurozone, but other members of the international community would like to see Greece make some effort at the sae austerity measures which they are asking of their own countries.

In the final analysis, no one wants to sacrifice, but EU governments cannot ask their own people to sacrifice whilst the Greeks live it up on those sacrifices without doing their own part to resolve the deepening debt crisis in their country.

Obviously this revision means that the UK economy is 0.1pc weaker than had been previously reported and also that much weaker than the same period in 2011. This is not good news for Mr. Osborne who has unwaveringly defended the austerity programme even though there are a number of obstacles such as the debt crisis in the euro zone and a weak demand for domestic products.

According to the chief economist in the UK this information is, in his words, “very disappointing.” In addition, Howard archer states that even a modest recovery is not probable because of the escalating crisis in Greece.

This is the first double dip recession in the UK since the mid-70s, 1975 to be precise, as the GDP fell to 0.3% for both the last quarter of last year and the first quarter of the current year. All those services rose by 0 .1% industrial production was down by 0.4% and construction down by 4.8% in the first quarter.

These figures are even more discouraging when the current prediction is that the UK will experience a 0.5% contraction on the year taken as a whole, according to the chief UK economist for Capital Economics, Vicky Redwood.

Perhaps this downward revision from the Office for National Statistics will prompt the BoE to release another round of quantitative easing to stimulate the economy. Even so, all eyes are on the UK’s largest trading partner, the eurozone, as the debt crisis deepens there.

Recently, Fitch downgraded Greece from B- to CCC and then went on to put the rest of the region on alert. If after the election scheduled for June 17 the anti-austerity faction gains prominence, these downgrades are more than likely to take place. Perhaps it will not happen immediately, but there is a great potential for wider downgrades in the very near future.

It is in the hands of the voters, it would appear, because if they vote strongly in favour of anti-austerity, this signals their exit from the single currency. Not only is austerity an issue but structural reform is at stake and if the voters reject these measures, the will show their lack of political and public support of the €173 billion EU/IMF bailout programme.

This is placing mounting pressure on the entire region to contemplate ‘contingency plans’ which already are being considered. The frontrunner for the next Greek election, Alexis Tsipras, calls the austerity measures being asked for ‘barbaric’ and has vowed that he will not yield to the EU’s demands to place his country under such extreme hardships.

At the moment Greece is being ‘ruled’ by a caretaker government and the IMF has suspended work on the international bailout pending the results of the upcoming elections. Whether or not Greece receives the bailout is riding on this election and given the fact that the leader of the rivaling factions is anti-austerity, the odds are in favour of Greece indeed exiting the single currency and defaulting on current bailout loans.

Conversely, inflation is expected to stay above the target of 2% at least for the next year which is not good news for households that are already struggling financially. According to Sir Mervyn, the economy will remain slow as well as uncertain and he refers to the current crisis in the eurozone as being a ‘storm’ heading in the direction of the UK.

He goes on to say that the UK has survived the biggest downturn since the 1930’s and that the loss of the eurozone, the UK’s leading trading partner, there will be a huge impact on the economy at home. There is no way to ‘quantify’ what the dissolution of the EU would do to the economy of Great Britain, but it will certainly have a dire consequences.

Although there is no way of telling when this dark ‘cloud’ will move past, again his metaphor, but he has every reason to expect that growth in the UK will indeed recover and that inflation will drop once again. Sir Mervyn then says that Great Britain will be ‘buffeted by winds’ and there is no way to know from which direction they will come, but come they certainly will.

In the end, recovery is made harder because of the uncertainty in the EU, but once the story unfolds, it will be easier to get a grasp on what needs to be done.

On Monday, financial markets were in turmoil as investors prepare for Greece’s imminent exit from the single currency and just the day before it was admitted that the ‘elite’ European policymakers were seriously considering the possibility that the single currency may be doomed. Markets were tumultuous as oil, shares and the euro were heavily unloaded by investors who fully expect Greece to depart the EU.

Again, Greece is stalling but EU leaders have only given President Karolos Papoulias until Thursday to join the continuing talks and broker a deal. Furthermore, Chancellor Osborne warns that even the thought of Greece exiting the euro is creating havoc in economies throughout all of Europe. He further believes that the crisis unfolding in the eurozone is significantly impacting growth in the region.

As a result of the uncertainty surrounding Greece’s departure, borrowing rates are skyrocketing for Italy and Spain because of the very real fear that they too will succumb to the contagion that very well may spread throughout all of southern Europe. On Monday, the FTSE 100 Index dropped more than 100 points, losing approximately two percent of its total value. As well, Madrid, Athens, Paris and Frankfurt saw huge falls in prices of shares.

At the end of the day, investors sought out safe havens in Germany (bonds) and the Great British Pound which benefited those two countries to some extent. Unfortunately, there is still a great deal of concern about the future of the EU.

Unfortunately, the construction industry took a hard hit in the first quarter that was much worse than had been anticipated as it shrank almost 5% which is contract to the 3% that was originally calculated. This is reportedly due to a decline in infrastructure and construction in the public sector.

It is expected that the ONS will soon revise the report for the wider economy and deepen the slump the UK is in. Instead of the 0.2% decline that was originally stated, it now appears that the ONS will state that the actual figure stands at a decline in the economy of 0.3% for the first quarter.

Even though the building sector only accounts for less than 10% of the entire economy, 8% to be exact, it is the driving force behind the second recession in a row which resulted in the UK now being in a double dip recession.

Part of the gloom surrounding the construction industry is the fact that several large scale projects are about to come to an end. For one, the Olympics construction is almost at completion and this will bring a huge number of cuts to the public sector. This will have a significant impact on jobs as well as on the construction output.

Since the construction industry was the one solid sector last year, it had been hoped that it would keep driving the economy upwards but this has not been the case. Hopes for a speedy recovery are fading as the one last bastion of hope is seeing a decline and economists are predicting that the current recession will be harder to break out of than previously anticipated.