‘Lost decade’ warning over ongoing recession

Britons could be faced with many more years of economic struggle unless government policies change, the Trades Union Congress (TUC) has claimed.

Following a report by the National Institute for Economic and Social Research (NIESR) estimating that gross domestic product shrank by 0.2 per cent in the three months to the end of June, TUC general secretary Brendan Barber warned the future could be far from bright.

"This grim forecast shows that unless the government changes course, the UK could be less than halfway through a lost decade of weak growth and high joblessness."

He argued that government austerity measures carry much of the blame, stating: "We need a more positive economic plan urgently that invests in new infrastructure, industries and decent job creation, rather than one that sucks the life out of the UK economy through endless cuts."

If predictions of a lost decade turn out to be accurate, this could make life even harder for those struggling to repay their debts and make ends meet, as hopes of improvements to incomes and the job market would become increasingly forlorn for many in such a scenario.

Those who can see no way out of their current situation may wish to seek additional help, such as a debt management plan, to avoid both severe personal and financial consequences.

One caveat to the projections issued by the NIESR was the calculation that the recession would not have continued were it not for the extra bank holiday in June to celebrate the Queen's Diamond Jubilee.

It said the economy grew by 0.1 per cent in the three months to May and would have expanded by 0.2 per cent in the period to June were it not for the unusual event.

However, it also said the underlying trend for the economy remains a "broadly flat" one, which has been a persistent feature of the economy for the last two years.

By Joe White