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Recession to be longest since war
Chancellor George Osborne is braced for official figures which will confirm the UK is in its longest double-dip recession for more than 50 years
Britain's longest double-dip recession for more than 50 years will be confirmed in official figures due to be published on Wednesday.
Gross domestic product (GDP) - a broad measure for the total economy - is forecast to have shrunk by around 0.2% between April and June in its third quarter in a row of contraction.
That would mark the longest double-dip recession since quarterly records began in 1955 and is believed to be the worst since the Second World War.
The last double-dip recession was in the 1970s, when the economy was hamstrung amid soaring oil prices and a miners' strike, but that only lasted two quarters. The latest decline is set to have been worsened by the extra bank holiday surrounding the Queen's Diamond Jubilee and record rainfall in April and June.
Recent estimates from the Bank of England said the celebrations could wipe up to 0.5% from output, while its governor Sir Mervyn King has warned the special events including the Jubilee and the Olympics will skew figures this year.
The new figures from the Office for National Statistics (ONS) will be a preliminary estimate and be subject to revision.
The economy entered a technical recession in the first quarter of the year, with GDP declining 0.3%, following a 0.4% drop in the final quarter of 2011. This followed its five quarters in a row of falls in 2008 and 2009 from which the economy has not fully recovered.
Investec chief economist Philip Shaw, who predicts a 0.4% fall in GDP, said the figures for the construction sector may be a "disaster", with falls of as much as 6% between April and June, following a 4.9% drop in the first three months of 2012.
The ONS figures are expected to show a return to growth in the current quarter, partly driven by the London Olympics. But the recovery is set to be lacklustre for months to come, with the International Monetary Fund having recently revised down the UK's growth forecast to just 0.2% in 2012 and 1.4% in 2013.
Howard Archer, of IHS Global Insight, said: "The economy should be able to achieve GDP growth in the third quarter, as it is helped by the making up of some of the activity lost to the Queen's Diamond Jubilee in the second quarter and also receives a limited overall boost from the staging of the Olympic Games."
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