the Business Forum and
the Economic Partnership
in Brighton & Hove
Homepage    BCRP Intranet    Funding    Events    Knowledgebase    Links    About us     Contact us
Key projects



Workforce development 


Business &

Property &
Development sites




Consultation opportunities

Brighton & Hove Business Forum
8-11 Pavilion Buildings, Brighton, BN1 1EE
Tel: 01273 735442
Email: info@brighton

© Brighton & Hove
Business Forum

News - 12 August 2010
Mervyn sends the Markets scrabbling

Double dip recession watch: Markets take fright over economic data

Fears that the UK could slip back into recession intensified yesterday as Markets took fright at the Bank of England's warnings on the UK economy accompanied by a range of depressing economic data.

Mervyn King - the Bank of England’s governor - cut the Bank’s growth forecast and warned that Britain faces a long and "choppy recovery". Businesses and consumers appear to be worried about looming public sector spending cuts and shaky economic prospects.

Official figures released at the start of the week showed a sharp rise in long-term unemployment and although there was afall in the number of people claiming jobless benefits it was smaller than expected.

The Bank's outlook intensified the debate over whether the economy is heading for a double-dip recession. The think tank, the National Institute of Economic and Social Research [NIESR] and has predicted that in UK output will remain well below its previous peak case until 2012.

The Bank cited the recent spending cuts as part of the reason why it is more cautious about UK growth prospects along with tight credit conditions and increasingly fragile consumer confidence. Its quarterly inflation report, which looks two years ahead, predicts growth of 3% then [previously it predicted 3.5%.]

The weakened outlook and the Bank's view that inflation will not fall back until 2012 left the financial markets scrambling to reassess the outlook for interest rates. The cost of borrowing for the government on a five-year bond fell to its lowest level in almost 20 years, as traders raised their bets that interest rates will remain at their record lows for many months to come.

Despite the fact that growth in GDP jumped to 1.1% in the second quarter as businesses enjoyed a rebound from harsh weather at the start of the year, many economists consider the Bank’s forecasts about growth to be too optimistic with a consensus suggesting it will be closer to 2% for each of the next two years. Even Mervyn King warned against reading too much into that second-quarter bounce.

Alan Clarke, economist at BNP Paribas, said: "I'm increasingly convinced growth will grind to a halt at the start of next year. We would be lucky if third-quarter growth is even half what it was in the second quarter, which was flattered by one-off factors"

King appeared particularly concerned about the latest business and consumer surveys, which he said had weakened "quite markedly". Last week, a key report on the services sector, which makes up the bulk of the economy, showed growth had dropped to a one-year low as companies complained about cancelled public sector contracts. Consumer confidence has also plunged back to recession levels according to Nationwide's monthly survey, while the prospect of hundreds of thousands of public sector job losses was blamed for falling house prices in a separate survey this week. A quarter of all homes in the UK are owned by public sector workers.

Read related items on:
Bank of England
King, Mervyn

Browse our business Knowledgebase or search by keyword


23 May 2018
Gingerman Restaurant Group to Open Restaurant at Hanningtons Estate Brighton
16 May 2018
Can you help us help rough sleepers? Search for a venue to provide shelter 15 May 2018
New Research Reveals Cost of Opening A Business in Brighton: £6,000 11 May 2018
Tech firm SaleCycle to open new office in Brighton, creating 30+ new jobs 4 May 2018
Get involved - National Numeracy Day This 16 May 1 May 2018
Barclays' High Growth & Entrepreneurs Awards 2018 launch to celebrate start-up leaders in the UK 30 April 2018
Barclays launches major drive to help SMEs tackle Cymbercrime 24 April 2018
An evening with Chris Fox, Lib Dem Peer 24 April 2018
"A triumph of innovation" 13 April 2018
Brighton city Centre Vacancy Rates continue to buck national trend 12 April 2018
The Ivy in the Lanes Set to open 2 May 2018 11 April 2018
Free Dr Bike Service Returns 20 March 2018
Brighton named most entrepreneurial city AND second best for student happiness according to Fresh Student Living 19 March 2018
A Meeting with Chris Fox, Lib Dem Peer - Why Business Matters 14 March 2018
Better Business for All Event with BEIS 7 March 2018
Brighton celebrates women in tech as Spring Forward festival returns for a fourth year 6 March 2018
Six months of success for BTN BikeShare 2 March 2018
Sustainability in Action masterclasses for Sussex businesses 2 March 2018
Doing Business in China comes to Brighton 1 March 2018
Brighton & Hove Chamber of Commerce presents: Protecting your brand- a guide for fast growth businesses 1 March 2018
Long haul passengers boost local economy and jobs, according to new Gatwick report on the 'Visitor Economy' 28 February 2018
Save time reporting crime 27 February 2018
Warren Morgan Resigns from Brighton & Hove City Council 23 February 2018
Brighton Technology Company, Paxton Ranks in Sunday Times 100 Best Companies to Work For 23 February 2018
Greater Brighton's Commercial Property Database 22 February 2018
SE-ASSIST - Launch of Loan Capital in Greater Brighton 19 February 2018
House Price update Q4 2017 19 February 2018
What would you do in a crisis? 19 February 2018
The investment journey for high growth entrepreneurs 9 February 2018
Make Change Count 2018 - helping rough sleepers in Brighton & Hove 8 February 2018
Brighton Technology Company Paxton Announces Recipients of New Scholarship Programmein Association with the University of Brighton 8 February 2018
Cyber London Accelerator Invites Summer 2018 Entries 8 February 2018
Innovate UK Launches Strand 2 Emerging and Enabling Technologies Sector Competition 8 February 2018
Success In Sussex As Food And Drink Heroes Crowned Winners 8 February 2018
UK Games Fund - Fourth Round Open to Applications 8 February 2018
Innovate UK & Prince's Trust Launch Young Innovators' Programme 6 February 2018
Brighton & Hove Food Partnership launches 'Kit Out The Kitchen' crowdfunding campaign 2 February 2018
Brighton & Hove Council and Crest Nicholson win £15m government funding to kickstart King Alfred project 1 February 2018
Could a Utilise Plus Programme grant help you?