UK ‘closer to recession’ as OECD data worsens

Further declines in the Organisation for Economic Cooperation and Development’s (OECD’s) leading indicators suggest the UK is getting closer to recession, according to macroeconomic forecasting consultancy IHS Global Insight.

The UK’s leading indicator dropped to 98.6 points in October, down from 99.3 in September and below the long-term average of 100. The OECD adds that indicator continues to suggest the country’s growth cycle is in a slowdown phase.

IHS Global Insight says the data adds weight to “serious concerns” that the UK economy is moving back towards recession, pointing out that the OECD’s indicator has fallen for nine months running.

Howard Archer, the chief UK and European economist at IHS Global Insight, says: “The economy is expected to struggle markedly over the next few months in the face of tighter credit conditions, rising unemployment and a still significant squeeze on consumers’ purchasing power coming from high inflation, muted wage growth and tight fiscal policy.”

Conditions in other major regions are also indicating economic slowdown, according to the OECD’s data. The eurozone, the US, Japan and the so-called Bric nations of Brazil, Russia, India and China have seen their leading indicators deteriorate in recent months.

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