A lack of consumer spending means the economy is unlikely to recover through this avenue, one expert has suggested.
Economist at the Centre for Economics and Business Research Charles Davis commented that the recession has likely been caused by organisations making cutbacks on investment.
He stated: “Consumers have not actually been saving as much as perhaps may be expected, [but] they cut back and now they are saving again.”
As the general public is beginning to put more money aside it makes it unlikely that an upturn will be generated by people purchasing, Mr Davis added.
Consumer spending contracted by 1.2 per cent, which was not as significant as the overall trend in the economy, he remarked.
According to figures from the Office for National Statistics – correct as of June 30th 2009 â€“ the UK’s gross domestic product has fallen by 4.9 per cent since the first three months in 2008.
The statistics also show that the economy contracted by 2.4 per cent in the first quarter of this year.
By Francis Finch