UK economy back in the sick bay

UK consumers are feeling the squeeze more than ever, while disappointing figures show Britain is heading back into recession.

More disappointing statistics have reinforced fears that the economy is slipping back into recession. Official figures showed that manufacturing output fell by 0.3% in August, a third successive monthly decline. Year-on-year, growth was up by just 1.5%, the weakest pace in 18 months.

Like-for-like retail sales rose by an annual 0.3% in September, but real spending remains down on last year. In the three months to August, unemployment rose to 2.57 million, a 17-year high. The jobless rate hit a 15-year high of 8.1%. The National Institute of Economic and Social Research said growth is still 4% below its pre-recession peak. This recovery is on track to being the weakest since the FirstWorld War.

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