Gordon Brown's former economic adviser, Ed Balls, has effectively repeated comments made by the Bank of England's deputy governor last October by asserting that the economy is experiencing the worst recession in over a century. While the government may downplay the sentiment, there's no avoiding this reality: unemployment and inflation will ensure a long and painful recovery for the UK.
Declines in the Baltic Dry Index and international air cargo volumes, along with forecasts of weak crude oil demand until 2012, have raised questions over various claims of a quicker-than-expected global economic recovery. Despite the recent rally in the stock market brought on by these claims, these new announcements indicate that a full recovery is still a long way off.
Government statistics released at the end of January indicate that the UK economy has returned to growth for the first time in 18 months. While the economy will continue to grow over the next two quarters as consumer sentiment improves, Datamonitor predicts that this growth will be only moderate, rather than the strong rebound that some have predicted.
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