In new figures being released by the ONS the recession is deeper than previously thought due to a weak construction sector. Previously it had been reported that the economy was down by 0.2pc but it has been revised downward even further to 0.3pc for the first quarter of 2012.

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With the recent news that the UK is indeed in the grips of a double dip recession, experts say that instead of focusing on austerity, we should be ‘buying British.’ Since this is the first the nation has faced in four decades, economists believe many people alive today don’t remember what it took to work our way out of those bleak financial times of the past.

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The year is only one-third over and it seems as though the news goes from bad to worse in the area of personal finance. Not only have Britons been hit with the fact that the UK is caught up in a double dip recession and the euro zone is still beset by a huge debt crisis but now major banks have announced that their mortgage rates will be going up as of today, 1 May.

For greater than 1 million homeowners mortgage payments may increase by as much as £200 annually because of these higher rates and the travesty in this is that many of these homes are already in negative equity. This is a huge problem for homeowners who might otherwise be able to refinance their homes because it would be virtually impossible to get a loan larger than the value of the home.

Halifax alone has approximately 850,000 customers who may be paying this £200 extra each year due to these higher rates. Other lenders who have announced an increase in mortgage rates include Clydesdale, Co-operative Bank, RBS and Yorkshire banks. These lenders have announced that rates will rise by as much as 0.5 percentage points for their current customers and is indicative of the fact that the days of low interest rates are over.

Although the Bank of England has kept rates at historic record lows, 0.5%, lenders are raising rates because they feel it is warranted by a floundering economy. During this time when households need as much help as possible, they seem to be getting hit from all sides from taxes to mortgage rates. Finding themselves in negative equity compounds the problem which may make things significantly worse for personal finance as well as the UK economy that is already in trouble.

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In recent weeks economists had been predicting that the economy would just slightly miss a double-dip recession by a very small growth of 0.1%. Unfortunately, even City economists missed the mark as the shocking news was revealed today that the nation is indeed in the grips of yet another recession.

Although there has been much talk of the potential for sliding backwards into a recession, many consumers don’t quite understand the awful significance of this event. After just having recovered, the UK took a downward turn s the UK GDP shrank 0.3% in the final quarter of 2011 and .03% in the first quarter of this year. This was truly a shock to government as well as economists as they had missed the mark by almost one-half of a percentage point. This is significant that they could have been so far off with their calculations.

So what does this mean for Britons? In effect, a recession is defined as two consecutive quarters of decline in the economy. It looks as though government will try to combat this news with increased fervour in their austerity programme. The public sector will most likely try to cut costs even further which means social programmes are likely to lose even more financing and jobs will be cut by the tens of thousands.

Since Britain’s debt is already at record levels, there is mounting pressures on government. It may still be too early to predict what moves the coalition government will make next, but it is almost certain that they will advance austerity measures on a country already plagued with sacrifice. The Prime Minister admitted that recovering from a recession which is the worst in ‘living memory,’ but the Labour shadow chancellor struck back with an “I told you so!”

Labour has always contended that the austerity drive was ‘self-defeating’ with cuts in spending and taxes rising almost by the day. The party further lashed out at David Cameron and George Osborne who they decry as ‘arrogant’ in their nonchalance when they were warned that austerity would lead the nation back into recession. As those predictions have now proven true, all eyes are on Labour to see if they will finally be heard.

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As recently as two days ago, the BoE was predicting a 0.1% growth in the GDP. However, today a policymaker for the Bank of England is now saying figures ‘could’ show a slight decline in growth. This would place the UK back into a recession, the first double-dip recession since 1975 and it would not be good news for those already suffering from budget cuts imposed by the austerity measures government adheres to.

This could be devastating news for the nation as it finally appeared as though manufacturing was back on track and services were picking up as well. Unfortunately, the growing debt crisis in the eurozone is wreaking havoc not only in the UK but around the globe as well, evidenced by yesterday’s markets.

Although the UK is not part of the single currency, they have been part of the bail out with quantitative easing which means that economic problems on the continent will surely affect Britain. As Holland’s president resigned and Nicolas Sarkozy is probably on the way out, Angela Merkel is continuing her drive for austerity in the EU.

Tomorrow’s data will show if austerity is working in the UK and if it is then Ms Merkel has a valid point. If not, if the UK is plunged into a double-dip recession, this does not bode well for Merkel or Sarkozy who is battling it out in a second round election for his job. No one knows what tomorrow will bring, hope or gloom, but at the moment it is not looking good.

With a turnaround in just 2 days in their predictions, the BoE has everyone waiting with baited breath to see what shape the UK economy is in. It can only be hoped that a recession is avoided as austerity is already crippling many social programmes and killing jobs by the tens of thousands.

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With new figures about to be released by the Office for National Statistics this coming Wednesday, there is some amount of concern as to whether or not the UK is in the throes of a double dip recession. Since the last quarter of 2011 saw a decrease in the GDP, down 0.3%, it is hoped that the ONT will show the 0.1% rise which many analysts believe to be the case. A recession is defined as negative growth in two consecutive quarters.

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Since the beginning of the recession several years back, business optimism has been steadily on the decline other than for very brief periods of time. However, since it appears as though the eurozone may be on the verge of stabilising, business optimism is on the rise once again but that is not preventing companies from stashing cash as a safety net. Optimism may be on the rise, but businesses are erring on the side of caution this time around.

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Fears of a double dip recession abating

There is mixed data coming out in regards to the state of economic health in the UK, but some key indicators point to the potential for growth in the coming year. Being the Queen’s diamond jubilee year and the same year that the Olympics will be held in the capital, there just might be a chance that the economy will get the boost it has been looking for over the past couple of years.

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ONS confirms UK economy shrank in Q4 of 2011

Even though the holiday season saw a shopping spree and government spending accelerated in the final months of 2011, the economy still fell by 0.2%, according to the latest figures released by the Office of National Statistics.

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Manufacturing sector may help UK avoid double dip recession

So far in 2012, the UK manufacturing sector has rebounded and prospects for the rest of the year are quite positive. After a bleak end to the previous year, orders are up both at home and abroad. According to the CBI, the manufacturing sector is at its highest point within the past half year and according to the order books of 471 manufacturers that were surveyed, order books show the upward trend is continuing.

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