Further evidence of economic slowdown

Numerous reports overthe past few days have confirmed a significant economic slowdown. The Chancellor, Alistair Darling, has said that there is "no doubt" the UK economy is slowing and has warned it will be a "difficult year" ahead. He warned of the dangers of allowing inflation to increase, calling for pay restraint to prevent the development of a wage-price sprial, so familiar to economics students of my generation. He pointed out that fuel and food price increases were hitting consumers. (Link to details)
This follows the warning from the CBI that 'the economy will grow at its slowest pace for 17 years.' The CBI's quarterly economic outlook shows that the employers' body has lowered its forecast for GDP growth in 2009 by 0.4% to 1.3%. The slowdown in consumer spending is set to intensify, says the report, pushing consumption growth down to 0.7% in 2009, the lowest level since 1992. (Link to details of the survey)

An indicator of the economic situation, contruction, was also under the spotlight with the news that the number of new houses being built had slipped to its lowest level since 1945. The biggest reason for this appears to be the inability of potential buyers to obtain mortgages. (Link to article)