Fears of a double dip recession grew in light of a recent drop in manufacturing output in the UK. The volume of new orders fell for the fourth month running in August. The dip in new business is the result of weak demand in the UK combined with rising global economic uncertainty and a reduction in the exports.
It is surprising that concerns over a double dip recession have only recently come to light in the press. This risk was immediately obvious to most people in the business world given the decision to increase VAT to 20% in January 2011 combined with the recent increase in income taxes and National Insurance. The reduction in disposable income combined with large cuts in government spending have not been matched by growth in the private sector.