Britain is more likely to suffer a double-dip recession as a result of the austerity measures outlined in last month's Budget, Geoffrey Dicks, of the Office for Budget Responsibility, said yesterday. "There are some Budget measures which will have reduced demand," he said. "So the near-term outlook for gross domestic product is not as good as before the Budget. I don't think that will mean a double dip [recession] but logically the chances of that happening have increased.'
Pennies from heaven - not!
Mr Dicks told the Treasury Select Committee that workers should prepare themselves for three years of pay pain. He predicts that salaries will increase, but the cost of living will rise even faster, which means their wages lose their spending power. And workers must wait until 2012 before they finally get a pay rise which will beat the rising cost of living. Mr Dicks's warning is the second in recent weeks that Britain could be facing another downturn. Adam Posen, a member of the Bank of England's monetary policy committee, said last month that a double dip recession could be on the cards.
