Output slide prompts triple-dip recession fears

It’s the data George Osborne probably didn’t want to see the week before his Budget.

Official figures show the UK manufacturing sector slumped by 1.5% in January, prompting fears of a triple-dip recession.

This represents the biggest monthly fall in manufacturing output since last June, when the additional Bank Holiday was a contributing factor.

Unsurprisingly, Pound Sterling fell in value against the US Dollar on publication of the figures.

An increasingly likely triple-dip recession raises the prospect of additional quantitative easing by the Bank of England; something that would devalue Sterling.

The news also piles more pressure on the Chancellor to take radical action in his Budget next Wednesday.

We wrote yesterday about our Budget 2013 wishlist and this contained a couple of more radical suggestions for boosting the economy. Could we see the abolition of VAT or capital gains tax, perhaps even a helicopter drop, next week?

What we suspect won’t help next week – or be considered politically acceptable – is more of the same on the economy.

Photo credit: Flickr/Joe Shlabotnik