UK is halfway to an official recession

Figures have revealed that the UK economy shrunk by 0.5% in the previous 3 months and although the statistics don't come as a major shock, the UK still isn't in an official recession.

A downturn in the economy actually becomes a recession following TWO or more consecutive negative quarters. There is no doubt in many peoples minds that we are already in a recession and just need the figures to prove it. Growth of the economy is measured by the GDP (gross domestic product) which measures national income and output.

These latest figure for the third quarter of 2008 are the worst since 1990 and although we're not technically in a recession the second quarter of 2008 showed zero growth which first indicated to many that we were heading for a recession.

Rising unemployment figures and ever rising food and fuel prices have only made the recession an ever increasing possibility since the second quarter. Together with the bank crisis, recession fears have caused the FTSE to fall to it's lowest level in 5 years. The British Pound has also fallen to a 5 year low against the US Dollar.

How is the "credit crunch" affecting you?