PwC: UK may avoid double dip recession

Tim Wallace
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GROWTH will slow almost to a halt in 2012, but the UK will probably avoid a double dip recession, according to a report out today from PwC.

GDP growth is expected to come in at one per cent in both 2011 and 2012, with a “30 to 40 per cent chance of recession,” chief economist John Hawksworth told City A.M.

PwC’s central scenario assumes that the Eurozone will “muddle through” with growth of less than one per cent and without a major meltdown.

“We expect George Osborne will take some steps towards a “plan A+” such as bringing forward infrastructure spending and targeting youth unemployment,” said Hawksworth.

“However, this will be in the region of billions of pounds, not tens of billions – markets would not like significant changes to fiscal plans.”

The auditor also studied variations in household finances across the UK, taking into account factors including unemployment, and house prices.

Households in London and the east are experiencing the least financial stress, with the index coming in at minus 1.64 and minus 1.15 respectively, while Wales and the north east are the most stressed, at 1.38 and 1.20.