THE UK could already be suffering from the start of a double dip recession, according to new data from accountancy group BDO.
Revealing the latest bearish news from its business trends report, BDO partner Peter Hemington has called on the government to confront the downturn with radical reforms to taxation and infrastructure.
“We urge chancellor Osborne [pictured] to tackle the slowing recovery head on in his Autumn Statement,” Hemington said. “Supply side reforms, in particular reform of the tax system, will be crucial if the UK is to promote investment.”
Boosting capital spending could kick start the economy, BDO said. “We would like to see radical measures considered – such as road pricing and privatisation – to attract private capital into the public infrastructure,” added Hemington.
Businesses expect their turnover to shrink over the next three months, according to the BDO index, which sank to 92.6 in October from 93.3 in September, its lowest level since June 2009.
“It is also the third consecutive month that the index has been below the critical 95 mark indicating on-trend growth, showing that the UK economy could already be contracting,” the report said.
The UK largest sector – services – is being particularly hit by current economic woes, the report showed. The output index for the summer was down from 93.9 to 92.9. Confidence in the sector for the coming six months also dropped, from 94.8 in September to 94.1 last month.