LGIM: One in three chance of double-dip recession in UK

The UK economy faces a one in three chance of falling back into recession by 2012, Legal & General Investment Management (LGIM)'s economist has warned.

Using the same model that highlighted the possibility of the financial crisis at the start of 2008, LGIM economist James Carrick suggests there is a 33% probability of recession in 2012 because of the Government's fiscal tightening measures. Carrick says the model suggests a 10% chance that year-on-year economic growth will be negative in a year's time, rising to 33% by 2012. However, since the figures are calculated year-on-year, the UK economy may begin contracting as early as the second half of 2011, Carrick warns. "The sharp cuts in public spending that the Government made in the ...