Bank of America economist warns of double dip risk

The game of 'chicken' being played out by US politicians could increase the risk of a double-dip recession, Bank of America warns.

Ethan Harris, North American economist at the bank, points out while consumer confidence is slowly creeping up, the recent increase in jobless claims shows the "weak recovery is getting weaker". He claims politicians have got their priorities wrong as the mid-term elections approach. "The rising risk of a double dip puts increasing focus on the policy response. In the run up to the election, politicians are clamouring for quick action, not to stimulate a dangerously weak economy, but to bring down the budget deficit," he says. "It is a bipartisan effort. Many Republicans want to ca...